Description

BSE introduces new Nomination Opt-Out API for mutual funds, mandating OTP-based authentication or video recording for investors opting out of nomination facilities.

Summary

BSE has introduced a new JSON-based Nomination Opt-Out API as part of revised nomination facilities in the mutual funds segment, implementing SEBI guidelines. The API enables members to register nomination opt-out details for investors choosing not to provide nominee information. This facility requires mandatory authentication through either OTP-based verification or video recording for individual investors creating new folios.

Key Points

  • New JSON-based API for nomination opt-out registration on BSE StAR MF platform
  • Mandatory OTP-based authentication or video recording for investors opting out of nomination
  • Applies to all individual tax status investors and new folios
  • Available through Manual, Bulk Upload, and API channels
  • API endpoint: https://bsestarmfdemo.bseindia.com/BSEMFWEBAPI/api/NomineeRegistration/V1
  • Requires nomination authentication mode (O for OTP, V for Video Recording)
  • Alphanumeric reference number mandatory for opt-out requests

Regulatory Changes

SEBI Guidelines Implementation:

  • Both nominee opt-in and opt-out details must be reported to RTAs/AMCs
  • Opting out of nomination via OTP-based authentication or video recording is now mandatory
  • New facility provided for existing client codes where nomination opt-out is ‘N’ to update required details

Authentication Requirements:

  • NominationAuthMode must be specified:
    • ‘O’ - OTP with declaration
    • ‘V’ - Video Recording
  • NomOptRefNo (alphanumeric reference number) mandatory for all opt-out cases

Compliance Requirements

For BSE StAR MF Members:

  • Integrate new Nomination Opt-Out API into existing systems
  • Implement JSON-based request/response handling
  • Ensure authentication mode capture (OTP or Video Recording)
  • Maintain alphanumeric reference numbers for all opt-out transactions

Mandatory API Parameters:

  • UserId (20 characters)
  • MemberCode (20 characters)
  • Password
  • ClientCode (10 characters)
  • NominationOpt (must be ‘N’ for opt-out)
  • NominationAuthMode (‘O’ or ‘V’)
  • NomOptRefNo (20 characters, alphanumeric)

Response Codes:

  • 100 - Success
  • 101 - Failure

Important Dates

  • Document Release: November 2025
  • Effective Date: Not explicitly specified in circular

Impact Assessment

Operational Impact:

  • Members must develop/modify systems to integrate new API functionality
  • Additional data capture requirements for nomination opt-out cases
  • Enhanced compliance tracking and audit trail requirements

Investor Impact:

  • Mandatory authentication for opting out of nomination increases security
  • Additional steps required for investors choosing not to nominate
  • Applies to all new folios with individual tax status

Market Impact:

  • Strengthens investor protection framework in mutual fund segment
  • Standardizes nomination opt-out process across BSE StAR MF platform
  • May initially slow account opening process due to additional authentication steps

Technology Requirements:

  • JSON API integration capability
  • OTP generation and validation infrastructure
  • Video recording capability for alternate authentication method
  • Secure storage of authentication reference numbers

Impact Justification

Mandatory SEBI-mandated regulatory change affecting all mutual fund investors and intermediaries using BSE StAR MF platform, requiring system integration and process changes