DigiLocker is a digital document collection platform that currently houses Aadhaar, PAN, Driving License and many other government issued documents on a single digital app.
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SEBI plans to use the government’s DigiLocker system to reduce the incidence of unclaimed assets in the equity market. This includes MF folios and stocks left with fund houses and depositories after the death of an investor. The regulator has proposed that fund houses and depositories should make demat and mutual fund holding statements available on DigiLocker.
Public comments sought by December 31
According to a TOI report, SEBI also wants KYC registration agencies (KRAs) to share investor death information with DigiLocker. By integrating DigiLocker with the process of transferring these assets to the rightful heirs, SEBI wants to reduce unclaimed assets in the securities market. It has issued a draft circular on the issue and has sought public comments by December 31.
What is DigiLocker
DigiLocker is a digital document collection platform launched by the government, which currently houses Aadhaar, PAN, driving license and many other government-issued documents on a single digital app. In December 2020, the government issued a notification to integrate details of bank accounts, insurance policies and new pension schemes on the DigiLocker platform.
All financial holdings in a single account
“The proposal to include MF and Demat holding statements in DigiLocker may make all financial holdings of individuals available in a single DigiLocker account,” Sebi’s draft circular said. In October 2023, Sebi had introduced a centralised process for reporting investor death through KRAs. The proposed method of integrating it with DigiLocker aims to make the process more smooth.
At present, DigiLocker users have the option to appoint individuals as nominees for their accounts. Sebi now wants KRAs to also share information about the death of the investor with DigiLocker after verifying such information. “At the behest of Sebi, Digital India Corporation (DIC) has put in place a system under which the DigiLocker system automatically notifies the nominee created in DigiLocker about the death of the user through SMS and e-mail,” the draft circular said.
How the new system will work
Investors will add a nominee to DigiLocker
After the death of the investor, KRA will verify the death of the investor and record it in DigiLocker.
DigiLocker will inform the nominee about the death of the investor.
The nominee can then initiate the process of transfer of financial assets
DigiLocker nominee can access the app account of the investor after his death.
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