Transfer of assets due to demise of MutualFund unitholders, AMFI has introduced a new set of norms..!

Transfer of assets due to demise of MutualFund unitholders, AMFI has introduced a new set of norms..!

In a note, AMFI said, “SEBI had directed the AMCs to adopt a standard Transmission Request Form and a common set of documents for transmission of units as prescribed by AMFI. AMFI, in consultation with AMFI’s Standing Committee on Operations/Compliance and Risk, has reviewed and updated the existing AMFI guidelines for Transmission of Units  including the supporting documents and has introduced the Transmission Request Forms to be used under different situations.”

With this, there will be a uniform request form and uniform documentation across fund houses to deal with transmission of units in case of demise of clients.

Typically, any of the following six scenarios could emerge on the demise of the client

·         Deletion of names of deceased unit holders in joint holding

·         Assets need to be transferred to surviving joint holders

·         Demise of sole owner or all owners - Nominee is registered

·         Demise of sole owner or all owners - Nominee is not registered

·         Appointed of new Karta due to demise of existing Karta

·         Demise of Karta of an HUF

Deletion of names of deceased unit holders in joint holding

Request form T1 from surviving unitholder / unitholders requesting deletion of name of deceased. Applicable if the deceased is second or third holder

Submit original death certificate of the unit holder or a duly notarised or attested photocopy of the same

Fresh bank mandate form along with cancelled cheque of the new bank account (applicable only if there is a change in existing bank mandate)

Fresh nomination form if surviving unitholder wants to change his nominee

KYC acknowledgement

Assets need to be transferred to surviving joint holders

Request form T2 is required to transfer units to the surviving unitholder

Original death certificate or photocopy attested by notary public or gazette officer

Copy of PAN card of the surviving joint holder (if PAN is not provided)

Cancelled cheque of the new first unitholder with his name printed on it or recent bank statement

KYC Acknowledgment

Demise of sole owner or all owners - Nominee is registered

Transmission request form T3

Death certificate

Copy of birth certificate, in case the nominee is a minor

Copy of PAN card of the nominee(s) / guardian (in case the nominee is a minor)

KYC acknowledgment or KYC form of the nominee(s) / guardian (where nominee is a minor)

Cancelled cheque with the nominee’s name pre-printed or copy of the nominee’s three month’s old bank statement

For transmission amount of up to Rs.2 lakh - Nominees have to get their signature attested by a bank manager. In case of minor, guardian’s signature has to be attested

For more than Rs. 2 lakh – Such a signature has to be attested by notary public, judicial magistrate first class in the given space in the transfer request form itself

Demise of sole owner or all owners - Nominee is not registered

Transmission request form T3

Death certificate

Copy of birth certificate, in case the nominee is a minor

Copy of PAN card of the nominee(s) / guardian (in case the nominee is a minor)

KYC acknowledgment or KYC form of the nominee(s) / guardian (where nominee is a minor)

Cancelled cheque with the nominee’s name pre-printed or copy of the nominee’s three month’s old bank statement

For transmission amount of up to Rs.2 lakh

Nominees have to get their signature attested by a bank manager. In case of minor, guardian’s signature has to be attested

Any appropriate document evidencing relationship of the claimant/s with the deceased

Bond of indemnity to absolve the AMC of legal responsibility signed by all legal heirs. However, if claimant is named as a beneficiary, an affidavit from legal heir alone would be sufficient

Each legal heir has to submit individual affidavits

NOC from other legal heirs where applicable

For more than Rs. 2 lakh

Such a signature has to be attested by notary public, judicial magistrate first class in the given space in the transfer request form itself

Each legal heir has to submit individual affidavits

Notarized copy of probated will or succession certificate issued by a court or letter of administration

Appointed of new Karta due to demise of existing Karta

If the case of a HUF, the property of the HUF is managed by the Karta and the HUF does not come to an end in the event of death of the Karta. In such a case, the members of the HUF will need to appoint a new Karta, who needs to submit following documents for transmission:

Request form T4 for change of Karta upon demise of the registered Karta

Death certificate of the deceased Karta in original OR photocopy duly attested by a notary public or a gazette officer

Bank’s letter certifying that the signature and details of new Karta have been updated in the bank account of the HUF & attesting the signature of the new Karta

KYC acknowledgment

Indemnity bond by all surviving coparceners including new Karta

If the transmission amount is upto Rs.2 lakh, any appropriate document evidencing relationship of the new Karta and the other coparceners with the deceased Karta

If the transmission amount is more than Rs.2 lakh, notarized copy of any of mentioned document has to be submitted - settlement deed, deed of partition or decree of the relevant competent court

Note: Co-parceners are only those males who are within 4 degrees in lineal descendent from the common male ancestor (deceased client) and including the common ancestor and the daughter of the common ancestor.

Demise of Karta of an HUF

Transmission request form T5

Death certificate

Copy of birth certificate in case the claimant is a minor

Copy of PAN card of the claimant(s) / guardian is a minor

KYC acknowledgment

For transmission amount of up to Rs.2 lakh - Nominees have to get their signature attested by a bank manager. In case of minor, guardian’s signature has to be attested

For more than Rs. 2 lakh – Such a signature has to be attested by notary public, judicial magistrate first class in the given space in the transfer request form itself

Bond of indemnity to be furnished by the claimant

If the HUF has been dissolved/partitioned by the surviving members after demise of the Karta, the transmission of units should be effected only on the basis of any of the documents: Notarized copy of settlement deed, deed of partition or decree of the relevant competent court

Other key points

·         AMCs cannot insist nominee or claimant to submit PAN copy if it is updated with KYC

·         The second surviving joint holder will become the primary or first holder

·         If the units are to be transmitted to a minor, KYC document of guardian has to be submitted

·         If the nominee is mentally unsound, the guardian has to be appointed by the court

·         Once a transmission request is received, AMCs and RTAs will be held responsible for informing the surviving unitholders or nominees to submit the claim for with required document for remaining folios

·         Also, AMCs and RTAs have to ensure that they do not honour fresh purchase or SIPs in such folios

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