SEBI proposes DigiLocker integration to reduce unclaimed assets

The Securities and Exchange Board of India (SEBI) has proposed integrating DigiLocker, a government-supported digital document storage platform, to streamline processes and reduce unclaimed assets in the securities market.

In a consultation paper released on Tuesday, SEBI recommended that depositories and mutual funds make demat and mutual fund holding statements accessible via DigiLocker. Additionally, KYC Registration Agencies (KRAs) would be required to share information about an investor’s demise with DigiLocker.

DigiLocker allows users to nominate individuals for their accounts. Upon a user’s death, the account status would be updated based on death registration data from the Registrar General of India (RGI) or KRA system records.

Nominees would receive automatic notifications via SMS and email, enabling them to access the deceased’s digital records. They could then contact the respective Asset Management Company (AMC) or Depository Participant (DP) to initiate the asset transmission process.

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This proposal aims to minimise unclaimed and unidentified assets while ensuring smoother transmission of financial holdings to rightful heirs, safeguarding investor interests.

SEBI has invited public feedback on the proposal until December 31, 2024.