SEBI partners with DigiLocker to reduce unclaimed assets, enhance investor protection

The Securities and Exchange Board of India (SEBI) on Wednesday partnered with DigiLocker to help investors track their securities holdings and reduce unclaimed financial assets.

This initiative, outlined in the SEBI's circular titled "Harnessing DigiLocker as a Digital Public Infrastructure for Reducing Unclaimed Assets in the Indian Securities Market," aims to enhance investor protection and streamline access to financial holdings.

By integrating DigiLocker with the securities market, the SEBI is ensuring that investors can store and retrieve details of their demat accounts and mutual fund holdings securely.

DigiLocker, which already provides access to bank account statements, insurance policies, and National Pension System (NPS) details, will now serve as a centralised platform for investors to manage their securities information.

According to the government, a key feature of this initiative is the nomination facility.

Investors can appoint data access nominees within DigiLocker, allowing them read-only access to the account in case of the investor's demise.

"This ensures that legal heirs can easily locate and claim financial assets without unnecessary delays," the government said.

To make the process smoother, the SEBI has enabled an automated notification system for nominees.

If an investor passes away, the KYC Registration Agencies (KRAs), which are registered and regulated by the SEBI, will notify DigiLocker.

Once notified, DigiLocker will automatically alert the nominated individuals, enabling them to initiate the asset transfer process with financial institutions.

The KRAs will play a vital role in verifying information and ensuring a seamless transition of assets to rightful heirs.

Meanwhile, the market regulator is slated to discuss major regulatory changes in its upcoming board meeting, which will be the first under the leadership of new Chairperson Tuhin Kanta Pandey.

The agenda includes new security measures for demat accounts, ensuring the independence of clearing corporations, expanding the definition of Qualified Institutional Buyers (QIBs), and revising fee collection rules for research analysts.

One of the key proposals aims to strengthen investor security by introducing a system similar to the Unified Payments Interface (UPI) for demat accounts.