MUMBAI: In order to address the issue of unclaimed financial assets, the markets regulator Sebi has partnered with the national public digital infrastructure DigiLocker system to help investors claim back their unclaimed assets as well as nomination facilities on this system. Accordingly, Sebi has mandated market participants like asset management companies (AMCs) and brokerages and their key responsibility areas (KRAs) to facilitate their customers to upload their details on this system.
“All AMCs and their registrar and transfer agents (RTAs) and recognised depositories along with KYC-KRAs are directed to register with the DigiLocker as ‘issuer’ so as to enable users/investors, at their own option, to fetch their holding statements, of the date immediately preceding the date of fetching, or transaction statements for the past 30 days of mutual fund units and demat accounts, respectively, in the user’s DigiLocker account,” the circular said.
The circular will be effective from April 1, the Sebi said.
With the partnership with the DigiLocker, this platform now supports demat account holdings, mutual fund statements and consolidated account statement, Sebi said, adding along with nomination facility for legal heirs with Sebi-registered KYC registration agencies (KRAs) to ensure smooth asset transition.This initiative enables investors to store and access information on their demat and mutual fund holdings through the DigiLocker.
DigiLocker users can now fetch and store their statement of holdings for shares and mutual fund units from their demat accounts, along with their consolidated account statements. This expands the existing DigiLocker services, which already include bank account statements, insurance policy certificates, and NPS account statements.
Users can also appoint data access nominee/s within the DigiLocker application. In the event of the user's demise, these nominee/s will be granted read-only access to the DigiLocker account, ensuring that essential financial information is easily accessible to legal heirs.
To being with, KRAs will serve as the primary source for verifying and triggering notifications to data access nominees, ensuring a smooth transition by facilitating seamless access to financial records, this mechanism helps minimise unclaimed assets and ensures the identification of assets that might otherwise remain unnoticed.
The government had on December 28, 2022, has stipulated that entities/institutions delivering services to the public shall integrate their system with the DigiLocker.
Accordingly bank statements, insurance policies and statement of new pension scheme are already available in the DigiLocker. Operationalising the DigiLocker integration of demat accounts and mutual funds folios, the Securities and Exchange Board (Sebi) issued a circular on Wednesday.
The inclusion of mutual funds and demat account statements within DigiLocker can make available the entire financial holdings of individuals in a single account—DigiLocker, along with nomination facility to its users, the circular said.
The nominee/s specified by the user is/are authorised to access the digital information of the user upon the demise of the user. While specifying the nominee, the user is required to provide the mobile number and e-mail address of the nominee.
User upon demise, the DigiLocker system will update the status of demise of its user, from either of the following sources-- register of deaths of the registrar general and census commissioner or the death certificate of the investor available with KRA system that administers the centralized mechanism for reporting demise of investors.
However, Sebi clarified that this information shared by the KRAs with the DigiLocker will not render it as an ‘issued document’. It has also clarified that the nomination mechanism in the DigiLocker does not alter the norms governing transmission for the mutual funds or demat accounts.
The circular also said at Sebi’s insistence, the Digilocker has created a mechanism whereby the DigiLocker automatically notifies the nominee/s about demise of the user through SMS and e-mail. After this, nominee/s can then access the digital information of the deceased DigiLocker user, through the nominee’s own DigiLocker account after authentication of his/her identity.
DigiLocker can facilitate information about the financial assets being available to DigiLocker nominee/s and aid in transmission of the assets, the circular said. Additionally, the DigiLocker will also provide the user the option to fetch CAS automatically on each January 1.
The circular directs KRAs to electronically share the details of all the instances of demise of investors available in their system with the DigiLocker with adequate safeguards for data safety.