Mutual Fund and Demat Transmission in India: How Units Move

The word most families have never heard is the one that matters here: transmission. Redemption is selling units or shares; transmission is moving the existing holding into the name of the nominee or legal heir, intact, when the holder has died. You almost always want transmission first — selling before the holding is properly in your name creates tax and ownership tangles that transmission avoids, because the units keep their original acquisition history instead of being treated as a fresh purchase by the transferee. Only once the holding sits in the right name does it make sense to decide whether to keep it invested or sell it.

Mutual funds and demat holdings both follow SEBI's framework for this, and SEBI has been actively standardising and simplifying the nominee-to-heir handover — most recently through a September 2025 circular that raised the value thresholds for the simplified route, described below — so the process is more uniform, and in most cases faster, than it used to be.

Where a nominee is registered, the transmission is the lighter path. SEBI's process centres on a transmission request form signed by the nominee, the death certificate (attested where required), and the nominee's identity and PAN. The registrar and transfer agent — CAMS or KFintech for most funds — or the depository participant for demat holdings, processes it against the folio or account.

The nominee generally receives the units or shares as a trustee for the legal heirs, so being the registered nominee makes the transfer smooth without, on its own, settling who ultimately owns the holding — that question is still answered by a will or by succession, exactly as with a bank account.

Without a nominee, the family has to establish who inherits before the RTA or depository participant will act. SEBI's documentation asks the legal heirs for proof of entitlement — typically a notarised affidavit from all the legal heirs on appropriately valued non-judicial stamp paper, identifying and claiming legal ownership of the securities, along with an indemnity and a no-objection from the other heirs.

Where the value involved is above the simplified-route threshold described below, the heavier documents come into play instead — a succession certificate, probate, a will, or a letter of administration, or the equivalent legal heirship certificate where one of those has already been obtained for the same estate. In practice this means a family sometimes has to obtain the same succession certificate they are already pursuing for a bank account and simply present a certified copy of it again to the RTA or depository participant, rather than starting an entirely separate court process for the securities alone.

A jointly held folio or demat account is simpler: on the death of one holder, the surviving holders can usually have the holding continued in their names on producing the death certificate, ahead of any question of nomination or succession. A single-holder account is where the nominee or heir process above applies in full. This is the same distinction as a bank account with an 'either or survivor' mandate, and for the same underlying reason — the surviving holder already has a recognised legal right to the whole holding, not merely a share of it, so there is nothing for a nominee or an heir to establish.

As with banks, check each folio and each demat account on its own terms — holdings spread across fund houses and depositories each carry their own registration, and a joint mandate on one does not extend to another opened separately.

In practice, the paperwork funnels through two kinds of intermediary. For mutual funds, it is the registrar and transfer agent — CAMS or KFintech handle the large majority of Indian fund houses between them — and for demat holdings it is your depository participant, operating under NSDL or CDSL. Both ask for broadly the same core set: the transmission request form, the original or attested death certificate, and identity and PAN verification for whoever is receiving the holding.

Where more than one fund house or more than one depository participant is involved, each processes its own transmission request independently, even for the same deceased holder and the same set of heirs — there is no single filing that clears every holding at once. Some fund houses and depository participants also accept a consolidated request covering several folios or ISINs held with them under the same client, which can save a family a considerable amount of repeated paperwork when it is offered; it is worth asking each intermediary whether that option exists before filing one request per holding by default.

SEBI's September 2025 circular reset the value below which the lighter documentation applies. For securities held in physical form, the simplified-document threshold rose to ₹5 lakh per listed issuer, up from ₹2 lakh previously. For securities held in dematerialised form, it rose to ₹15 lakh per beneficiary account, up from ₹5 lakh — a substantial widening of who qualifies for the easier route. These revised limits took effect for RTAs, listed issuers, depositories and depository participants from 1 January 2026.

Below the relevant threshold, the affidavit-and-indemnity route above is generally enough. Above it, expect the RTA or depository participant to ask for the succession certificate, probate, will or letter of administration instead. Because the exact figure applies per issuer or per beneficiary account rather than to an entire estate, a family with several smaller holdings may clear the simplified route on every one of them even where the combined value would not have.

With a clean nomination and complete papers, transmission is generally a matter of weeks rather than months, since the RTA or depository participant is verifying documents rather than waiting on a court. It stretches out when a nominee was never registered, when the death certificate is not properly attested, when PAN or KYC does not match the folio, or when heirs cannot agree and the value crosses the threshold for a court document — at which point the timeline follows the succession certificate process instead, which typically runs to several months on its own.

A useful way to think about the two speeds is that the RTA or depository participant is not itself the bottleneck in the slow cases — the court process is, and everything the intermediary does happens either well before that court step or well after it, not in parallel with it.

The preventable part, again, is upstream: register nominees on every folio and demat account rather than assuming one registration covers all of them, and keep a record of where the holdings are so the family is not first discovering an account while trying to transmit it. A folio consolidated for convenience, or a demat account moved to a new depository participant, is also worth rechecking — the nomination does not always carry over automatically with the move.

A less obvious failure is holding the same investor's assets under slightly different name spellings or address records across different fund houses — one folio under a maiden name, another under a married name, say. Each mismatch between the death certificate, the identity documents and the folio's own records is one more query the RTA raises before it will proceed, so having KYC consistent across every holding is worth doing well before a transmission is ever needed.