The Securities and Exchange Board of India (SEBI) has taken a major step to improve investor protection by collaborating with DigiLocker. This partnership aims to help investors track their securities holdings, reduce unclaimed financial assets, and ensure smoother access to investment details.
The initiative is outlined in SEBI’s circular titled “Harnessing DigiLocker as a Digital Public Infrastructure for Reducing Unclaimed Assets in the Indian Securities Market.” With this move, SEBI aims to ensure that investors have a centralized, secure, and efficient way to store and manage their financial holdings.
DigiLocker: Access to Financial Holdings
By integrating DigiLocker with the Indian securities market, SEBI is providing investors with a safe digital space to store and retrieve information about their demat accounts and mutual fund holdings. DigiLocker already offers access to bank account statements, insurance policies, and National Pension System (NPS) details, and now, it will also act as a centralized hub for securities-related data.
This digital approach will not only make financial management easier for investors but also reduce the number of unclaimed assets that often go unnoticed. With all investment details available in one place, investors can track their assets more efficiently and avoid financial losses.
Nomination Feature Ensures Smooth Transfer
A key highlight of this initiative is the nomination facility, which allows investors to appoint data access nominees within DigiLocker. This means that in the event of an investor’s passing, their nominee will have read-only access to the account, ensuring that assets can be easily located and claimed without unnecessary delays.
To further simplify the process, SEBI has introduced an automated notification system for nominees. If an investor passes away, KYC Registration Agencies (KRAs), which are registered and regulated by SEBI, will inform DigiLocker about the event. Once notified, DigiLocker will send an automatic alert to the nominated individuals, allowing them to start the asset transfer process with financial institutions.
The KRAs will play a crucial role in verifying the required information and ensuring that the transfer of assets to the rightful heirs happens smoothly. This eliminates confusion and legal hurdles that often delay asset claims.
Regulatory Changes to Strengthen Investor Security
SEBI is also preparing to introduce new regulatory measures to strengthen investor security. In its upcoming board meeting, which will be the first under the leadership of new Chairperson Tuhin Kanta Pandey, the market regulator is set to discuss key changes in the financial sector.
The meeting agenda includes introducing new security features for demat accounts, ensuring the independence of clearing corporations, expanding the definition of Qualified Institutional Buyers (QIBs), and revising fee collection rules for research analysts.
One of the most important proposals is to implement a system for demat accounts similar to the Unified Payments Interface (UPI). This initiative is expected to enhance security and simplify financial transactions in the securities market, making it easier for investors to manage their portfolios.
Move Towards a More Secure Financial Future
SEBI’s partnership with DigiLocker marks a significant milestone in digitalizing and securing the Indian financial market. By providing investors with easy access to their securities and reducing unclaimed assets, SEBI is ensuring a more transparent and investor-friendly financial ecosystem.
With further regulatory changes on the horizon, India’s securities market is expected to become more secure, accessible, and efficient, benefiting investors and financial institutions alike.
