SEBI On Digilocker: To facilitate the transfer of financial assets in the name of investors in the stock market or mutual funds after their death, the stock market regulator SEBI (Securities and Exchange Board of India) is preparing to mandate the use of DigiLocker. The financial assets of investors in Demat accounts, including shares and mutual fund units, will be securely stored in the government’s digital storage system, DigiLocker.
Stock and Mutual Fund Unit Details to Be Stored in DigiLocker
The market regulator, the Securities and Exchange Board of India (SEBI), has proposed the use of the central government’s digital storage system, DigiLocker, to simplify and facilitate the transfer of financial assets in the name of any investor after their death. This proposal aims to make it easier for the investor’s nominee or heir to claim and manage their financial assets.
The financial assets, which include statements of Demat accounts containing shares, debentures, and mutual fund units, will be securely stored in DigiLocker.
Nominee Notification on Investor’s Death
Under this proposal, when an investor passes away, DigiLocker will update the account and notify the nominated heir or nominee. This will allow the nominee to access the financial asset details and transfer them accordingly. SEBI’s goal is to prevent stocks and mutual funds from becoming unclaimed assets and to ensure a smooth transfer to the rightful heir.
Suggestions Accepted Until December 31
SEBI has proposed in its consultation paper that depositories and mutual funds should make Demat and mutual fund holding statements available on DigiLocker. Additionally, it has been proposed that KYC Registration Agencies (KRAs) share information about the death of the investor with DigiLocker. DigiLocker users will have the option to nominate someone to access their account. SEBI has invited suggestions on this proposal, with the deadline set for December 31, 2024.