The Securities and Exchange Board of India (Sebi) has established guidelines mandating mutual fund investors and demat account holders to register a nominee or formally opt out of nomination. This requirement aims to ensure that a designated individual can claim the securities upon the investor's death. If no nominee is registered, the assets are transferred to legal heirs through a process known as transmission, which can be lengthy and documentation-heavy. Legal heirs must present a death certificate and proof of identity, and if there is a will, a probate may be required. In cases where the nominee differs from the legal heirs, the latter retain ownership rights, and disputes can arise. Additionally, inherited assets are treated as an inheritance for tax purposes, meaning capital gains tax is only applicable when the heir decides to sell the assets. The transfer processes also vary between mutual funds, demat shares, and physical share certificates, with Sebi encouraging the dematerialization of physical shares to simplify these transactions.