Description

SEBI defers the Phase III implementation of nomination facility requirements from December 15, 2025 to a future date to be notified separately, following stakeholder requests for more time to complete system developments and process changes.

Summary

SEBI has deferred the implementation timeline for Phase III of the nomination facilities framework from December 15, 2025 to a future date to be notified separately. This follows representations from stakeholders citing operational difficulties and the need for more time to complete system developments and process changes. The circular references the original January 10, 2025 notification and subsequent amendments issued on February 28, 2025 and July 30, 2025.

Key Points

  • Phase III implementation timeline deferred from December 15, 2025 to a date to be notified later
  • Deferment granted based on stakeholder requests regarding structural implications and operational challenges
  • Previous Phase II was deferred to August 8, 2025 and Phase III to December 15, 2025 via July 30, 2025 circular
  • All other provisions in the nomination circulars dated January 10, 2025, February 28, 2025 and July 30, 2025 remain unchanged
  • Circular effective immediately

Regulatory Changes

No new regulatory changes introduced. This circular solely extends the implementation timeline for Phase III of the existing nomination facilities framework. The substantive requirements remain as specified in the original circulars.

Compliance Requirements

Applicable to:

  • Asset Management Companies (AMCs) of Mutual Funds
  • Registrars to an Issue and Share Transfer Agents (RTAs)
  • Association of Mutual Funds in India (AMFI)
  • Recognized Depositories
  • Registered Depository Participants

Action Required:

  • Continue preparations for Phase III implementation
  • Await further notification from SEBI on the revised implementation date
  • Ensure ongoing compliance with Phase I requirements already in effect

Important Dates

  • January 10, 2025: Original nomination facilities circular issued (SEBI/HO/OIAE/OIAE_IAD-3/P/ON/2025/01650)
  • February 28, 2025: Amendments and phased implementation announced
  • July 30, 2025: Phase II deferred to August 8, 2025; Phase III deferred to December 15, 2025
  • December 11, 2025: Current circular issued
  • December 15, 2025: Original Phase III deadline (now deferred)
  • To be notified: New Phase III implementation date
  • Immediate effect: This circular comes into force immediately

Impact Assessment

Operational Impact:

  • Provides additional time for AMCs, RTAs, depositories and participants to complete necessary system developments
  • Reduces implementation pressure on market infrastructure providers
  • Allows for better preparation and testing of nomination-related processes

Market Impact:

  • Low immediate market impact as this is a timeline extension rather than substantive change
  • Beneficial for operational readiness and smooth transition when Phase III is eventually implemented

Investor Impact:

  • Minimal direct impact on existing investors
  • Delay in full implementation of enhanced nomination protections until new date is announced

Industry Feedback:

  • Extension granted based on multiple stakeholder representations citing structural implications and operational difficulties
  • Indicates industry-wide challenges in meeting the original December 15, 2025 deadline

Impact Justification

Timeline deferment provides operational relief to AMCs, RTAs, depositories and participants but does not change the substantive requirements. Medium impact as it affects implementation schedules for multiple market participants.