Non-Financial Transactions — Nomination, Address Change, Transmission
Non-financial transactions change an investor's records without moving money or units. This lesson covers changes of contact and bank details, nomination, transmission of units after a death, a minor turning 18 and the folio lock.
What counts as non-financial
A purchase or a redemption moves money or units. A non-financial transaction changes only the records behind a folio: a change of address, bank account, email or mobile number, a nomination, the transmission of units after a unitholder's death, or the change of status when a minor becomes an adult.
The records decide where money and communications go. Redemption proceeds are paid to the registered bank account, so a change of bank account takes effect only after the fund house has verified it.
Nomination
A single holder must either nominate or expressly opt out; for a joint folio nomination is optional. A nomination or an opt-out is signed by all the holders of the folio, and in a joint folio all the holders must consent to a nomination or a change in it.
Transmission
Transmission is the passing of units after a unitholder's death. The units pass to the nominee or the legal heirs on a claim, made on the fund house's transmission request form with the documents on its checklist.
Where a nominee is registered, the claim is supported by the death certificate, the nominee's KYC and the transmission request form; a court succession certificate is not asked for. The nominee receives the units as trustee for the legal heirs. Transmission to the nominee discharges the fund house, but it does not by itself decide who finally inherits.
A minor turning 18, and the folio lock
A minor's folio is operated by a guardian. When the minor turns 18 the folio is frozen for transactions, any SIP, STP or SWP stops, and the guardian can no longer operate it. Transactions resume once the new adult completes KYC and registers bank details in his or her own name.
From 30 April 2026 an investor may also choose to lock a folio. The facility is voluntary.
Rules at a glance
A nominee's claim (illustrative)
Prakash, a sole holder, had registered his sister Rekha as nominee. After his death Rekha submits the transmission request form with his death certificate and her own KYC. The fund house transmits the units to her without asking for a succession certificate.
Rekha now holds the units as trustee for Prakash's legal heirs. The fund house's part is done once the units are transmitted to her; who finally inherits is a separate question that the nomination does not settle.
Key points
- Non-financial transactions change records such as address, bank account, contact details and nomination, without moving money or units.
- A single holder must either nominate or expressly opt out; for a joint folio nomination is optional, and all holders sign.
- On a unitholder's death the units pass to the nominee or the legal heirs on a claim.
- With a registered nominee no succession certificate is asked for; the nominee holds the units as trustee for the legal heirs.
- When a minor turns 18 the folio is frozen, and SIPs, STPs and SWPs stop, until the new adult completes KYC and gives bank details.
- A voluntary folio lock facility is available from 30 April 2026.
Common misunderstandings
- A nominee is not thereby the final owner: the nominee receives the units as trustee for the legal heirs.
- A succession certificate is not asked for where a nominee is registered: the claim rests on the death certificate, the nominee's KYC and the transmission request form.
- A guardian cannot go on operating a folio after the minor turns 18: it is frozen until the new adult completes KYC and bank details.
- A SIP in a minor's folio does not simply carry on at 18: SIPs, STPs and SWPs stop until the formalities are complete.
- The folio lock is not automatic: it is a facility an investor may choose.
Questions people ask
Is nomination compulsory?
A single holder must either nominate or expressly opt out, so doing nothing is not an option. For a joint folio nomination is optional.
Who signs a nomination in a joint folio?
All the holders. All of them must consent to a nomination or to a change in it.
When does a change of bank account take effect?
After the fund house has verified it.
What this lesson relies on
- SEBI (Mutual Funds) Regulations, 2026 — regulation 27 (nomination)
- SEBI Master Circular for Mutual Funds (20 March 2026) — nomination, transmission of units and minors' folios
- SEBI provisions on the voluntary folio lock facility (available from 30 April 2026)
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.