Attention Investors: Must Complete This Before April 1 - SEBI

From April 1, SEBI, India's securities regulator, is set to implement a transformative measure aimed at mitigating unclaimed assets (UA) in the Indian securities market.

This move integrates DigiLocker, the Government of India's digital document wallet, into the regulatory framework. The initiative addresses longstanding challenges around handling dormant accounts and unclaimed holdings.

SEBI's Directive and Strategic Implementation
SEBI's directive mandates several proactive steps to combat UA creation. These include stringent norms for inactive accounts, compulsory provision of contact and bank details by investors, and simplified procedures for asset transmission in case of investor demise. The central focus lies on leveraging DigiLocker as a secure repository for financial documents, alongside existing functionalities like Aadhaar, PAN, and driving licenses.

Harnessing DigiLocker for Investor Protection
DigiLocker serves as a crucial tool in this initiative, offering users the ability to store and access digital copies of important financial documents. With functionalities at par with originals under the Information Technology Act, DigiLocker ensures secure and authenticated document management.

This integration extends to mutual fund and demat account statements, consolidating financial holdings into a single, accessible platform.

Nomination and Demise Reporting Mechanism

Central to SEBI's strategy is the nomination feature within DigiLocker, empowering users to designate nominees who can access their digital assets posthumously. Upon the demise of a user, DigiLocker updates the status using verified data from the Registrar General and Census Commissioner or through information shared by KYC Registration Agencies (KRAs). This ensures timely notification to nominees via SMS and email, facilitating seamless transmission of assets.

SEBI's directive mandates all Asset Management Companies (AMCs), Recognized Depositories, and KRAs to integrate with DigiLocker. This integration allows investors to fetch their latest holding and transaction statements, ensuring transparency and accessibility of financial data. Stakeholders are also required to communicate their compliance status to SEBI, reinforcing regulatory oversight and accountability.