How SEBI’s New DigiLocker Feature Will Help Investors?

Have you ever wondered how many financial assets in India remain unclaimed due to lack of access, forgotten details, or simply because the legal heirs are unaware? Imagine a scenario where an investor builds a significant portfolio of stocks and mutual funds, but upon their passing, their family struggles to access these assets. In a significant move to address this long-standing issue, the Securities and Exchange Board of India (SEBI) has introduced new functionalities within DigiLocker, allowing investors to securely store and access their demat holdings, mutual fund statements, and Consolidated Account Statements (CAS).

This step is not just a technological enhancement—it’s a much-needed intervention in a market where unclaimed financial assets have been a persistent concern. The new integration with DigiLocker could change the way investors and their families manage financial information, ensuring that assets don’t go unnoticed or unclaimed due to bureaucratic hurdles. Read on to know more about this with TICE.

A Digital Revolution in the Securities Market

DigiLocker, the government-backed cloud storage service, has been steadily expanding its functionalities. Initially launched as a repository for essential documents like Aadhaar, PAN, and driving licenses, it has now become a powerhouse of financial security. SEBI’s circular, titled “Harnessing DigiLocker as a Digital Public Infrastructure for Reducing Unclaimed Assets in the Indian Securities Market,” marks a groundbreaking initiative to tackle the issue of unclaimed securities and make financial management more accessible.

For the first time, investors can now use DigiLocker to:

• Fetch and store their demat holdings statements

• Securely access mutual fund statements

• Keep track of their Consolidated Account Statements (CAS)

This initiative is aimed at streamlining access to financial information, not just for investors but also for their families, ensuring that financial assets are never lost in the maze of paperwork and formalities.

How This Benefits Investors and Their Families

One of the biggest concerns in estate planning and wealth management is ensuring that the next of kin can seamlessly access financial assets in case of an investor’s demise. SEBI’s new feature tackles this challenge head-on with the introduction of the Data Access Nominee facility within DigiLocker.

Here’s how it works:

• Investors can nominate a trusted person who will receive read-only access to their financial records.

• If an investor passes away, the nominee will be automatically notified via DigiLocker.

• The information will be verified by KYC Registration Agencies (KRAs), which act as the primary source for confirming the investor’s status.

• Once confirmed, the nominee will receive access, enabling a smooth transition and reducing the likelihood of assets remaining unclaimed.

This feature is expected to eliminate the typical red tape associated with claiming financial assets, making it easier for families to retrieve what is rightfully theirs without unnecessary delays.

Why This Move Matters?

India has long struggled with the issue of unclaimed financial assets. As per recent estimates, unclaimed investments in mutual funds alone are worth thousands of crores. Many investors fail to appoint nominees, and in cases where they do, the process of asset transfer can be cumbersome, often requiring extensive paperwork and legal procedures.

This new initiative by SEBI serves as a preventive measure against such scenarios. It ensures:

• Transparency: Investors and their families can have a clear view of their financial holdings.

• Security: Financial data is stored in a government-approved, encrypted environment.

• Convenience: Everything is accessible digitally, anytime, anywhere.

The Role of KRAs in Securing Financial Access

To make the process seamless, SEBI has designated KYC Registration Agencies (KRAs) as the primary intermediaries for verification. Their role includes:

• Confirming an investor’s demise using government records and official verification.

• Initiating an automated notification to Data Access Nominees.

• Ensuring a smooth transition of financial records to the rightful heirs.

This system drastically reduces the complexity of asset recovery, offering a structured and automated mechanism to ensure investments don’t remain in limbo.

A Step Towards Financial Inclusion and Awareness

This collaboration between SEBI and DigiLocker is a testament to India’s push towards financial inclusion and digital governance. By reducing the number of unclaimed financial assets, the initiative strengthens investor protection and enhances trust in the securities market.

For investors, this means greater control over their finances and an assurance that their wealth will not be lost. For families, it’s a step towards financial awareness and empowerment.

As India moves towards a more digitized economy, such innovations will play a crucial role in ensuring that financial assets remain within the rightful reach of their owners and beneficiaries. SEBI’s decision to integrate DigiLocker into the securities market is a landmark move that could reshape the future of financial asset management in the country.

The integration of DigiLocker with securities holdings is more than just a feature update—it’s a paradigm shift in financial accessibility. With SEBI’s proactive approach, investors now have a powerful tool to secure their investments, ensure hassle-free access for their families, and prevent their hard-earned money from being lost in bureaucratic red tape.

This is a major step towards a more transparent, secure, and efficient securities market in India—one where every investor can have peace of mind knowing their financial legacy is protected.