How to Verify Unclaimed Assets in Stocks and Mutual Funds Through DigiLocker?
In order to safeguard investors and secure their interests, the Securities and Exchange Board of India (SEBI) has initiated steps to reduce the generation of unclaimed assets (UA) in the securities market. As per a circular from the regulator, these steps would be effective from April 1, 2025.
SEBI’s Measures to Reduce Unclaimed Assets
Several initiatives have been introduced to prevent the accumulation of unclaimed assets. These include:
- Establishing norms for inactive or dormant accounts and folios.
- Mandating investors to provide their contact and bank details.
- Requiring investors to either nominate beneficiaries or explicitly opt out of making a nomination.
- Simplifying norms for transmission of assets.
- Designing a central mechanism for reporting the death of an investor.
In order to further minimize unknown unclaimed assets, attempts have been made to bring digital public infrastructure, more specifically the DigiLocker system, and KYC Registration Agencies (KRAs) registered with SEBI, into the picture.
Role of DigiLocker in Tracking Financial Assets
DigiLocker, a digital repository of documents launched by the Government of India, enables citizens to store and access vital documents such as Aadhaar, PAN, driving licenses, and death certificates. Documents saved in DigiLocker are deemed to be equivalent to their original documents.
Also, DigiLocker has a nomination facility wherein specified people can access digital data once the identity of a deceased account holder is confirmed. There has been a setup where DigiLocker itself sends an SMS and email to nominees informing them about the death of the user. Through this facility, DigiLocker can help release information pertaining to financial assets to nominees and ease the process of transferring assets.
However, the nomination process within DigiLocker does not modify the existing transmission norms for mutual funds or demat accounts.
SEBI’s Directives to Market Participants
In order to increase ease of access, all asset management companies (AMCs) and their registrar and transfer agents (RTAs) and all authorized depositories have been directed to register with DigiLocker as an “Issuer.” This way, investors can download their holding statements for mutual fund units and demat accounts from their DigiLocker accounts.
Investors can fetch:
- Their statement of holdings as of the previous day to the request.
- Statements of transactions for the past 30 days.
- Their consolidated account statement (CAS) on January 1st of every year automatically.
Advisory to Investors
In order to get the best use of these facilities, investors are motivated to register themselves as users of DigiLocker and appoint nominees for their accounts. This added nomination will act as a security in addition to the already done nominations of demat accounts and mutual fund folios.
With the integration of DigiLocker in the financial management process, investors are able to make it easier for themselves to keep tabs on and manage their assets and keep their financial interests protected.
