SEBI Streamlines Access to Unclaimed Assets via DigiLocker

The Securities and Exchange Board of India (SEBI) has proposed integrating the DigiLocker platform to facilitate a more efficient process for claiming unclaimed assets belonging to deceased investors. According to a discussion paper, SEBI suggests requiring depositories and mutual funds to provide demat account and mutual fund (MF) holding statements in DigiLocker.

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SEBI has proposed that DigiLocker automatically update a user's status upon their demise, using data from the Registrar General of India. Additionally, nominees would be automatically notified via SMS and email, enabling them to access the deceased's digital financial information and initiate the transmission of assets.

This initiative aims to streamline the process of claiming unclaimed assets, offering greater convenience to investors and their nominees. SEBI has invited public comments and suggestions on the proposals until December 31, after which it may finalize the framework. 

Key Proposals and Features:

Integration with DigiLocker

• Depositories and mutual funds will upload demat and MF holding statements to DigiLocker.
• The KYC Registration Agency (KRA) system will share information on an investor’s demise with DigiLocker.

Automated Updates and Notifications

• DigiLocker will automatically update a user's status upon their demise, using data from the Registrar General of India or the KRA system.
• Nominees will receive notifications via SMS and email, granting them access to the deceased’s financial information stored in DigiLocker.

Simplified Asset Transmission

Nominees can initiate the transmission process for financial assets by contacting the respective asset management companies (AMCs) or depository participants (DPs).

Anticipated Benefits:

• Centralized Financial Records: Consolidates financial holdings into one digital platform for easy access.
• Streamlined Processes: Reduces delays and complexities in asset transmission.
• Minimized Unclaimed Assets: Addresses the issue of unidentified or unclaimed assets in the securities market.

Call for Public Feedback:

SEBI has released a draft circular inviting comments and suggestions from the public until December 31, 2024. Feedback can be submitted through SEBI’s website or emailed to ia_ho@sebi.gov.in.

Context and Implications:

The initiative aims to tackle the challenges posed by unclaimed assets, such as inactive accounts and undistributed dividends, by providing a digital-first solution. Once formalized, the framework will require AMCs, depositories, and KRAs to integrate with DigiLocker while ensuring robust data security measures. This move aligns with SEBI's broader goals of enhancing transparency and efficiency in the financial ecosystem.