Sebi for using DigiLocker to reduce unclaimed assets in securities market
New Delhi, Dec 11, 2024
In case of a user's death, DigiLocker will update the account status based on death registration data from the Registrar General of India, or information from the KRA system, the regulator proposed
In a significant move to protect investor interests and reduce unclaimed assets (UA) in the securities market, the Securities and Exchange Board of India (SEBI) has proposed leveraging DigiLocker as a digital public infrastructure. This initiative aims to streamline asset transmission upon an investor's demise and ensure timely access to financial information for nominees.
The proposal, detailed in a draft circular issued for public comments, outlines a comprehensive mechanism to integrate DigiLocker with mutual fund (MF) statements, demat account holdings, and the centralised KYC Registration Agency (KRA) system. The plan aligns with SEBI’s ongoing efforts to address unclaimed and unidentified assets in the financial ecosystem.
Key features of the initiative
Integration with DigiLocker:
Depositories and mutual funds will provide demat and MF holding statements through DigiLocker.
The KYC Registration Agencies (KRA) system will share verified information on an investor’s demise with DigiLocker.
Nomination mechanism:
DigiLocker users can nominate individuals who will receive automatic notifications via SMS and email upon the user’s demise.
Nominees will gain access to the deceased’s financial information stored in DigiLocker.
Automated status updates:
DigiLocker will update a user’s status upon death using data from the Registrar General of India or the KRA system.
Simplified transmission process:
Nominees can initiate the transmission process for financial assets by approaching the respective asset management companies (AMCs) or depository participants (DPs).
Benefits for investors
By integrating DigiLocker into the securities market, SEBI aims to:
Consolidate an individual’s financial holdings in a single digital location.
Ensure easy access to financial information for nominees, thereby reducing delays in asset transmission.
Minimise the creation of unidentified and unclaimed assets.
Public comments invited
SEBI has invited public feedback on the draft circular until December 31, 2024. Stakeholders can submit their comments through SEBI’s official website or via email to
Background and rationale
Unclaimed assets, including inactive accounts and unclaimed dividends, pose a challenge in the securities market. Often, family members are unaware of an investor’s holdings, leading to assets becoming unclaimed or unidentified. The integration with DigiLocker aims to bridge this gap by enabling a digital-first approach to asset management and transmission.
Once finalised, the circular will mandate all AMCs, depositories, and KRAs to integrate their systems with DigiLocker. SEBI also emphasised the need for adequate data safety measures during implementation.
[The Business Standard]
