Depositories' Apps To Help Retail Investors Detect Fraud, Monitor Inheritable Holdings Better: SEBI
A key highlight of the platform is its ability to provide investors with real-time information about their holdings, which is sent to the Central Board of Direct Taxes.
The data from the depositories would act as a deterrent against fraud if given in the hands of investors, said SEBI Chairperson Madhabi Puri Buch at the launch of a unified investor app on Thursday.
Calling depositories a source of truth, Buch explained that a unified app powered by the National Securities Depository Limited or the Central Depository Services Limited would give investors enough data to decide on buying, selling, or holding their positions in the market.
Another issue that would be resolved by investor access to such data, as per Buch, is the eradication of confusion around inheritance.
"We've taken initiatives in terms of nominations, standardisation of transmission of units of mutual funds, and common reporting of passing away of investors," she said.
The SEBI Chairperson mentioned that the participants present during the market revolution twenty years ago are now passing on, and their investments are being inherited by their heirs. Hence, the issues around where those securities are lying need to be addressed now, making such initiatives important.
"So I think this app has the additional benefit of consolidating everything to make transmission and inheritance in the hands of the heirs of the investors extremely easy and extremely traceable," she said.
Other features of the digital platform were highlighted by the SEBI Whole Time Member Kamlesh Varshney. He said that app will help in shareholder participation and streamlining tax compliance.
Speaking at the launch event, Varshney outlined key features of the app, including its ability to facilitate voting across various resolutions, which he said would "completely democratise" the resolution-passing process in corporate operations.
He also mentioned that the app would, in the future, also integrate proxy advisory services.
Varshney stated that, currently, the participation of minority shareholders and individual investors is very low; with this initiative, the process will become more inclusive.
A key highlight of the platform is its ability to provide investors with real-time information about their holdings, which is sent to the Central Board of Direct Taxes.
Varshney pointed out that while depositories are required to send quarterly updates to CBDT, most investors only review their Annual Information Statement at the time of filing their tax returns, often leaving potential discrepancies unaddressed until late in the financial year.
"This is a critical improvement. Hardly anyone monitors their AIS statement regularly. They either check it only at the time of filing returns or leave it to their chartered accountant," he said.
The app allows investors to flag discrepancies in real time and request corrections from depositories before filing returns, reducing the chances of receiving notices from the Income Tax Department due to mismatches.
