Sebi's new proposal: DigiLocker to become key in asset transfer after death

In case of a user's death, DigiLocker will update the account status based on death registration data from the Registrar General of India (RGI), or information from the KRA system.

Market regulator Sebi has proposed using DigiLocker, a government digital storage system, to make it easier to manage and transfer financial assets when someone passes away. The idea is that financial documents, like statements for demat accounts (which hold stocks) and mutual funds, will be stored securely in DigiLocker.

 

When a person dies, DigiLocker will automatically update their account and notify the person they’ve nominated (like a family member) to manage the assets. This way, the nominee can access the deceased's financial details and work with the right agencies to transfer the assets. Sebi’s goal is to prevent unclaimed assets (like stocks or funds) from being left behind and to ensure that assets go smoothly to the right heirs.

 

• In its consultation paper, the regulator has proposed that depositories and mutual funds should provide demat and mutual fund holding statements on DigiLocker.
• Further, it has been suggested that KYC Registration Agencies (KRAs) should share information on an investor's demise with DigiLocker.
• DigiLocker users can nominate individuals for their accounts.

 

Sebi is asking for public feedback on this idea by December 31.

 

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