In a major step to improve investor protection and financial transparency, the Securities and Exchange Board of India (Sebi) has partnered with the Government's digital wallet – DigiLocker. With this collaboration, the regulator aims to minimise the creation of unclaimed assets in the securities market.
According to Sebi, as of January 31, 2025, Indian investors have unclaimed funds amounting to Rs 323 crore and unclaimed securities worth Rs 182 crore.
All Investment Info Under One Hood
Sebi's new initiative will allow investors to securely store and access details of their demat holdings, mutual fund statements, and consolidated account statements (CAS) through DigiLocker. The circular would come into effect from April 1, 2025, the Sebi said.
"The inclusion of MF and demat holding statements within DigiLocker, can make available the entire financial holdings of individuals in a single account," Sebi said in the circular dated March 19.
DigiLocker already offers access to Adhaar, PAN, Driving Licence, Birth and Death certificates, bank account statements, insurance policies, and statements of the New Pension Scheme (NPS). The digital wallet also provides a nomination facility to its users.
Benefits Of DigiLocker
Citizens can access important documents anytime, anywhere. These documents are authentic and legally equivalent to the originals. With the citizen's consent, digital document exchange can occur, enabling faster delivery of government benefits and promoting financial inclusion.
DigiLocker acts as a secure platform for exchanging documents between trusted issuers and requesters/verifiers, with the citizen's consent. It also allows real-time verification, enabling government agencies to directly verify data from issuers with the user's authorisation.
Here’s How DigiLocker Will Help Tackle Unclaimed Assets
DigiLocker is linked with the Registrar General of India’s Civil Registration System (CRS), which allows users to easily access and store their Birth and Death certificates. If a death certificate includes the Aadhaar number, the system will automatically update the person’s status to "deceased."
While Aadhaar is optional for generating a death certificate, without it, DigiLocker may not be able to update the status. In such cases, the information about the investor's demise from the KYC Registration Agencies (KRAs) can be used as an alternative for reporting to DigiLocker.
Sebi, through a circular dated October 3, 2023, implemented a mechanism via KRAs. According to this, when a notifier (joint account holder, nominee, legal representative, or family member) provides verified information about the demise of an investor along with the death certificate to any Sebi-registered intermediary, the details are captured in the KRA system.
The KRA system then automatically sends a message to all intermediaries who have updated or fetched the deceased investor's KYC records. These intermediaries are required to freeze the account and inform the notifier(s) about the transmission procedure, preventing the generation of unidentified unclaimed assets.
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