Procedural framework for dealing with unclaimed amounts lying with entities having listed non-convertible securities and manner of claiming such amounts by investors
Summary
This circular establishes a procedural framework for listed entities to transfer unclaimed interest, dividend, or redemption amounts from non-convertible securities to Escrow Accounts. It mandates the subsequent transfer of these funds to the Investor Protection and Education Fund (IPEF) after seven years if they remain unclaimed by investors. The document outlines specific obligations for issuers, including website disclosures, nodal officer designation, and investor search facilities. This section details the procedural requirements for listed entities to formulate and display policies regarding investor claims for unclaimed amounts. It outlines specific obligations for processing these claims, including verification timelines, communication protocols, and record maintenance. Additionally, it establishes a framework for transferring unclaimed funds to the Investor Protection and Education Fund (IPEF) after seven years, including penalty provisions for default. The Board must verify documentation and process refunds for listed entities, ensuring the amount does not exceed what was transferred to IPEF. The Board can request further information or return incomplete applications, whi
Text
Regulation 61A (2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requires listed entities to transfer unclaimed interest/dividend/redemption amounts to an Escrow Account within seven days of the expiry of thirty days from the due date.
Amounts remaining unclaimed in the Escrow Account for seven years shall be transferred to the Investor Education and Protection Fund (IEPF) for companies or the Investor Protection and Education Fund (IPEF) for non-company entities.
Recognized Stock Exchanges, Issuers, and Depositories are directed to comply with conditions, disseminate provisions on websites, put in place necessary systems, and create investor awareness.
The provisions of this Circular shall come into effect from March 1, 2024.
The listed entity shall, within seven days from the date of expiry of the thirty-day period, transfer the unclaimed amounts to an Escrow Account opened in any scheduled bank.
In case of default in transferring the amount to the Escrow Account, the entity shall pay interest at twelve percent per annum on the untransferred amount for the period of default, accruing to investors.
The listed entity shall designate a Nodal Officer (Director, CFO, CS, or Compliance Officer) as the point of contact for investors, SEBI, Stock Exchanges, and Depositories, displaying their details on the website.
Within thirty days of transferring unclaimed amounts to the Escrow Account, the listed entity must upload details including ISIN, amount, category, number of investors, dates, and Nodal Officer contact information on its website.
The listed entity shall provide a search facility on its website allowing investors to verify unclaimed amounts using PAN and Date of Birth, or Name and DP ID/Client ID.
Amount (in INR) transferred to Escrow Account (including penal interest, if any, for delay in transfer by the listed entity)
Date when unclaimed amount was transferred to Escrow Account (dd/mm/yyyy)
The listed entity shall formulate a policy specifying the process to be followed by investors for claiming their unclaimed amounts. Such a policy shall include the following: 8.1. the format in which claim has to be submitted by the investor; 8.2. the procedure and documentation for making claim... 8.3. the documents required... 8.4. manner of submission... 8.5. timeline within which the investor can submit documents... 8.6. conditions for rejection of claim and option of re-filing... 8.7. timeline within which the claim shall be processed... 8.8. contact details... The said policy shall be displayed on the website of the listed entity.
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Source: SecMarx — Procedural framework for dealing with unclaimed amounts lying with entities having listed non-convertible securities and manner of claiming such amounts by investors. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.