When a nominee claims mutual funds (SOA format), what actually happens?
Do the units get transferred to the nominee’s folio? (Because I don’t see any section for the nominee’s folio in the T3 form.)
Or
Does the AMC redeem the units of the deceased person and credit the amount to the nominee’s bank account? (If that happens, what if the stock market crashes — wouldn’t the nominee face a huge loss?)
I don’t see any nominee’s folio details mentioned in the T3 form — they only ask for a cancelled cheque of the nominee’s bank account.
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@Sayantan2003 AFAIK, the T3 form collects the nominee’s bank details for verification and setting up future payouts. The AMC does not redeem the units by default. It creates a new folio in the nominee’s name and transfers the units.
Once the transmission process is initiated, redemptions and fresh investments are blocked in the deceased’s folio to prevent any further activity.
After the transmission is complete, the nominee becomes the unitholder and can choose to either redeem or continue holding. The applicable NAV is based on the date of processing.