Nomination and transmission

Two words the exam loves to blur are nomination and transmission, and keeping them apart is the whole game. Nomination is the instruction an investor leaves in advance about who should receive the units. Only individual investors can nominate, and they may name up to ten nominees, giving each a percentage that totals 100 (if no percentages are stated, the units are divided equally). Two traps recur: a minor’s folio cannot carry a nomination, and a PoA holder cannot make or change one. Since 30 September 2023, a single-holder investor must either nominate or formally opt out with a signed declaration, though for jointly held folios this is optional. And not everyone can be a nominee, an individual (a minor via a guardian, or an NRI), or a government or local authority, may be named; a trust (except religious/charitable), society, body corporate, partnership or HUF Karta cannot.

Transmission is what actually happens after a unit-holder dies: the transfer of units to the person entitled. The order of entitlement is the part to memorise. If the first holder dies, the second holder simply becomes the first holder, and importantly a joint holder’s right takes precedence over a nominee. For a sole holder, the units pass to the nominee, or, if there is no nomination, to the legal heirs. The paperwork is consistent: the death certificate of the deceased, the claimant’s KYC, and usually an indemnity, submitted on the standard AMFI transmission request form. Handled well, transmission is one of the most human parts of this job, so getting the precedence and the documents right genuinely matters to a grieving family.