SEBI Proposes Using DigiLocker to Reduce Unclaimed Assets in Securities Market

The Securities and Exchange Board of India (SEBI) proposed leveraging DigiLocker, a government-backed digital document storage platform, to streamline processes and minimise unclaimed assets in the securities market.

SEBI’s Effort to Tackle Unclaimed Assets

SEBI is tackling the growing issue of unclaimed assets (UA) in India’s securities market through a new initiative involving DigiLocker.

Unclaimed assets, often caused by investor death or undelivered financial communications, can accumulate and become unidentified, leaving assets unaccounted for.

SEBI’s initiative integrates DigiLocker, a government-supported platform, with the systems of Depositories, Asset Management Companies (AMCs), and KYC Registration Agencies (KRAs) to securely store financial information and facilitate the transmission of assets to rightful beneficiaries.

Simplifying Asset Transmission via DigiLocker

Through DigiLocker, investors can store documents such as PAN, Aadhaar, death certificates, and financial asset statements, including Mutual Funds and demat holdings.

If the investor passes away, the platform will automatically update their status, either based on the death certificate from the Registrar General of India (RGI) or via data from the KRA system.

The nominee, once registered, will be notified via SMS and email and can access the deceased investor’s financial information.

This initiative aims to simplify the process of transmitting assets to the nominee, ensuring that financial assets do not remain unclaimed or unidentified.

SEBI urges investors to use DigiLocker and specify a nominee to ensure smooth transmission of assets in case of death.

The Securities and Exchange Board of India has sought public comments till December 31 on the proposal.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.