Investors can soon store, access their demat, MF holdings via DigiLocker

After the user's death, DigiLocker automatically notifies the nominated individuals (DigiLocker Nominees) via SMS and email, helping them manage the deceased's assets

In a significant step towards investor protection and financial transparency, the Securities and Exchange Board of India (Sebi) has partnered with DigiLocker to address the issue of unclaimed financial assets in the Indian securities market.

 

The new initiative enables investors to securely store and access information on their demat holdings, mutual fund statements, and consolidated account statement (CAS) through DigiLocker, thereby benefiting investors and their legal heirs. The circular would come into effect from April 1, 2025, the Seb said.

 

Key highlights of the initiative

 

Seamless access to securities holdings: DigiLocker users can now fetch and store statements of their demat accounts, including shares and mutual fund holdings, as well as their CAS. This initiative expands DigiLocker’s existing suite of services, which already includes bank account statements, insurance policy documents, and National Pension System (NPS) account statements.

 

 

Nomination facility for smooth asset transition: A major highlight of this initiative is the introduction of a nomination facility within DigiLocker. Investors can appoint Data Access Nominees, who will be granted read-only access to their DigiLocker accounts in the event of their demise. This ensures easy accessibility of essential financial information by legal heirs, simplifying the transition process.

 

Automated notifications for nominees: Upon the investor’s death, the KYC Registration Agencies (KRAs), which are registered with and regulated by Sebi, will notify DigiLocker. The system will then automatically alert the Data Access Nominees, allowing them to initiate the asset transmission process with relevant financial institutions.

 

Role of KYC Registration Agencies (KRAs): KRAs will serve as the primary verification entities, ensuring smooth execution of nominee notifications and facilitating seamless asset transition. Their role will be pivotal in verifying user details and triggering notifications to Data Access Nominees.

 

The collaboration between Sebi and DigiLocker will provide protection to investors by minimising unclaimed assets and ensuring financial information remains accessible. Sebi has directed asset management companies (AMCs), RTAs, and depositories to register with DigiLocker to allow investors to fetch their mutual fund and demat account details. KRAs will also share information on investor deaths with DigiLocker.

 

Through this, Sebi aims to reduce unclaimed assets in the securities market by addressing issues such as dormant accounts, lack of contact or bank details, and simplifying transmission norms.