Standard Operating Procedure (SOP) on Revised Nomination Facilities

Reference: CDSL Communiqué No. CDSL/OPS/DP/POLCY/2025/567 dated August 25, 2025
(Aligned with SEBI Circular No. SEBI/HO/OIAE/OIAE_IAD-3/P/ON/2025/01650 dated January 10, 2025)

1. Objective

To establish a uniform internal procedure for handling demat accounts in the following scenarios:

  • Appointment of nominees as per revised SEBI norms.
  • Operation of accounts in case of incapacitated investors who retain capacity to contract.
  • Providing doorstep support to senior citizens and investors with special needs.
2. Scope

This SOP applies to all demat account holders (individual or joint) and their registered nominees with Taurus Corporate Advisory Services Limited. It must be followed by all staff handling client servicing, account modification, or investor support functions.

3. Nomination Framework
  • Investors may appoint one or more nominees (excluding minors) in demat accounts.
  • Investors may empower any registered nominee to act on their behalf during physical incapacitation, provided they retain legal capacity to contract.
  • Investors may define the percentage or absolute value of assets that such a nominee may encash during the incapacitation period.
  • The investor may change the empowered nominee without restriction.
4. Definition of Incapacitation

“Incapacitation” means physical inability to sign but with retained mental capacity to contract, as per Section 11 of the Indian Contract Act, 1872.
This does not include cases where the investor is in a coma, unconscious, on ventilator support, or of unsound mind.

5. Procedure upon Incapacitation

a. Intimation

  • Empowered nominee submits written intimation of incapacitation (Annexure-A format) along with:
    • Medical certificate specifying the reason and duration of incapacitation.
    • Proof of identity of the nominee.

b. Verification

  • A designated officer visits the investor personally to verify:
    • The investor’s capacity to contract.
    • The authenticity of the medical certificate.
    • Thumb/toe impression or mark (if applicable) taken in presence of an independent witness.
  • The officer records remarks: “Thumb/toe impression affixed in my presence.”

c. System Update

  • Record incapacitation flag and nominee details in the DP system.
  • Notify both the investor and the empowered nominee.

d. Nominee Operation

  • Empowered nominee must be KYC compliant.
  • Nominee may perform transactions within the investor-specified limits (amount or percentage).
  • Transaction thresholds are static throughout the incapacitation period and will not adjust for market movement.
  • Funds received from sale/redemption must be credited only to the investor’s linked bank account.

e. Restrictions

  • No third-party (including legal heirs) can act unless registered as nominee.
  • Empowered nominee cannot request service changes (bank, email, mobile, etc.).
  • Pledge creation (including margin pledge) is not permitted during incapacitation.
6. Cooling-off Period and System Access
  • 48-hour cooling period applies post registration of incapacitation before transaction access.
  • Initially, transactions may be conducted using investor’s login credentials.
  • System enhancement to allow nominee login using their credentials will be implemented jointly by Depositories and AMCs.
7. Doorstep Support

Special doorstep support must be facilitated for:

  • Senior Citizens: Based on date of birth in KYC records.
  • Investors with special needs or sickness: Upon submission of valid medical proof.
  • Support may include collection of documents, service requests, or nomination registration.
8. Recovery and Reactivation

Once the investor recovers:

  • The incapacitation flag is removed upon verification and documentation.
  • The nominee’s authorization is revoked.
  • Investor’s signature and rights are reinstated.
9. Compliance & Record-Keeping
  • Maintain proper records of incapacitation requests and verification visits.
  • Maintain medical certificates and witness details.
  • Maintain system logs of all nominee transactions.
  • Ensure full compliance with SEBI and CDSL circulars.

Download: SOP Nomination Letter of Authorisation