DigiLocker is a digital document collection platform that currently houses Aadhaar, PAN, driving license and several other government-issued documents on a single digital app.
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 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 several 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 centralized process for reporting investor death through KRAs. The proposed method of integrating it with DigiLocker aims to make the process more smooth.
Currently, DigiLocker users have the option to appoint individuals as nominees for their accounts. Sebi now wants KRA 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 created 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 nominees to DigiLocker
- After the death of the investor, KRA will verify the demise of the investor and record it in DigiLocker.
- DigiLocker will inform the nominee of the death of the investor.
- The nominee can then initiate the process of transfer of financial assets
- The DigiLocker nominee can access the app account of the investor after his death.
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