Sebi eases access to unclaimed amount for investors of three asset classes

Entities must transfer such funds to an escrow account and release the funds when an investor/legal heir/nominee/successor makes a fair claim. If there is no claimant for seven years from the due date, then the amount must be transferred from the escrow account to the Investor Protection and Education Fund (IPEF). If an investor makes a claim at this point, then the listed entity must release the funds to investors and then get a refund for that from the IPEF.

The latest circulars have given a detailed framework, including timelines and penalties, for this.

Listed entities who have issued non-convertible securities and interest/dividend/redemption amount that has not been claimed for 30 days from the issue of this amount must transfer such amount to the escrow account within seven of the expiry of the 30 days. If there is any delay in this, they will have to pay an interest of 12 percent per annum from the date of default to the date of transfer.

These entities also have to designate a nodal officer as a point of contact for investors who want to claim the amount and have details of the amount they have transferred to the IPEF of their website in a prescribed format, along with the contact details of the nodal officer.

The entities even have to provide for a search facility to make it easier for investors to identify if they have any claim.

For InVITs and REITs, the investment manager has less time to transfer the unclaimed amount. The manager has to transfer the payment due and unclaimed for 15 days within seven days from the expiry of these 15 days.

The rest of the provisions are largely the same.