Why do you invest in mutual funds or stocks? For securing your future and your loved ones’ future isn’t it? You want your loved ones to be financially secure even in your absence, don’t you? There were thousands of investors who wanted the same; but unfortunately, their investments are still unclaimed, as they did not declare their nominees for the mutual fund accounts, or Demat accounts. To solve this issue and help people claim the investments left by their parents, or loved ones SEBI has proposed DigiLocker integration.
How will DigiLocker Integration Work?
Before understanding how this can work, let’s understand DigiLocker a bit, though most of you must have heard or used it already. So DigiLocker is a storage system for all your identification cards, numbers, licenses, and other crucial documents such as PAN, AADHAAR, Covid Vaccine Certificates, Bank account details, NPS, and more. All this information is stored digitally on the government-backed platform and you can use them instead of physical documents where required. As proposed by SEBI, the DigiLocker will be available for accessing the Demat account statements and mutual fund statements. With this, the nominees declared on the DigiLocker application can claim the investments if the investors’ demises.
The details are here –
- Once and if the SEBI’s proposal is approved then mutual fund statements and Demat accounts will also be available on the DigiLocker similar to your Bank account details.
- Now the investor needs to declare a nominee on the DigiLocker itself apart from the nominees declared separately for the mutual fund folios and Demat accounts. They also need to submit their mobile phone number and email id/s.
- Once the DigiLocker integration is done, the depositories and the AMCs will share the mutual fund account holding statements, and Demat account statements with DigiLocker.
- The status of the investor on the platform will be updated either from –
- KYC Registration Agencies (KRAs)
- Data on the registration of death of the Registrar General of India
- The nominee will get notified once the investor’s demise is updated with DigiLocker via SMS or e-mail
- Then the nominees can get access to the investor’s mutual funds and stocks using their own DigiLocker account as well.
Benefits of DigiLocker Integration
According to IEPF, as of March 2023, there were shares worth ₹ 25000 crore and above lying unclaimed in Demat accounts. On the other hand, AMFI notified (May 2023) that there were unclaimed dividends worth ₹ 2600 crore lying with the mutual fund houses.
This DigiLocker Integration can help the investor pass on his or her wealth smoothly to the nominees, without the latter going through trouble for redeeming the investments with different mutual fund houses, and stock brokerage houses with which the investor had a Demat account.
Since DigiLocker needs KRA agencies to update the details of the investors from different sources, the unclaimed amounts will also be reduced and the purpose of investments will be served.
Wrapping up
SEBI has asked for public opinion on this proposal and you can share your opinion by 31 December 2024. There are many families, that suffer not just emotionally, and mentally after the death of their loved ones, but financially as no nominations were declared or even if declared, they do not know with which mutual fund house or brokerage house the investments have been lying with unclaimed. This DigiLocker integration will update the nominees even if they aren’t aware and then they can easily access the investments.
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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.