Procedural framework for dealing with unclaimed amounts lying with Infrastructure Investment Trusts (InvITs) and manner of claiming such amounts by unitholders
Summary
This circular establishes a procedural framework for Infrastructure Investment Trusts to handle unclaimed distribution amounts and outlines the process for unitholders to claim them. It mandates the transfer of such amounts to an Escrow Account within seven working days after a fifteen-day declaration period, followed by eventual transfer to the Investor Protection and Education Fund. The document specifies obligations for InvITs regarding interest on defaults, website disclosures, and claim policies. This section outlines the procedures for processing unclaimed amounts, including timelines for verification, payment, and record maintenance by the Investment Manager. It details the obligations of the InvIT to transfer unclaimed funds to the IPEF after seven years, along with associated penalties for default and information disclosure requirements. Finally, it establishes the mechanism for refund claims from the IPEF and applies these provisions mutatis mutandis to legal heirs or successors. This section contains Form A, which is a template for the Investment Manager of an InvIT to report unclaimed amounts transferred to the Investor Protection and Education Fund (IPEF). It also incl
Text
Regulation 18(6)(b) of the SEBI (Infrastructure Investment Trusts) Regulations, 2014 mandate that not less than ninety percent of Net Distributable Cash Flows (NDCFs) of the InvIT shall be distributed to the unitholders.
Distributions shall be declared and made not less than once every six months in case of publicly offered InvITs and not less than once every year in case of privately placed InvITs, not later than fifteen days from the date of declaration.
Any amount remaining unclaimed or unpaid out of the distributions declared by a InvIT shall be transferred to the ‘Investor Protection and Education Fund’ constituted by the Board in terms of section 11 of the Act.
The unclaimed or unpaid amount of a person that has been transferred to the Investor Protection and Education Fund may be claimed in such manner as may be specified by the Board.
An application for claim of entitled amounts needs to be made by a unitholder to the InvIT which shall process the claim and then seek refund from the Board for the said amount.
This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act 1992 and Regulation 33 of the InvIT Regulations.
The provisions of this Circular shall come into effect from March 1, 2024.
For InvITs having unclaimed amounts for less than 7 years, interest computation starts from March 1, 2024. For those holding amounts for more than 7 years, transfer to IPEF must occur on or before March 31, 2024.
The Investment Manager shall, within seven working days from the date of expiry of fifteen days from declaration, transfer unclaimed amounts to an Escrow Account termed as the ‘Unpaid Distribution Account’.
In case of default in transferring the amount, the Investment Manager shall pay interest at twelve percent per annum on the untransferred amount for the period of default, accruing to the unitholder.
The Investment Manager shall designate a Nodal Officer who shall be the point of contact for unitholders, SEBI, Stock Exchanges, and Depositories, and display their details on the InvIT website.
The Investment Manager shall upload details including amount, category, number of unitholders, dates of due/transfer/IPEF, and Nodal Officer contact info on the InvIT website within thirty days of transfer.
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Source: SecMarx — Procedural framework for dealing with unclaimed amounts lying with Infrastructure Investment Trusts (InvITs) and manner of claiming such amounts by unitholders. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.