Unclaimed dividends and shares: If you have unclaimed dividends and shares, it is very likely that they would have been transferred to the Investor Education and Protection Fund. In this article, we understand when unclaimed dividends and shares make way to the Investor Education and Protection Fund and what investors should do.
Market regulator Securities and Exchange Board of India (Sebi) has revealed that over 70% of demat accounts with single ownership lack nomination, creating hurdles for legal beneficiaries to access their shares and dividends.
According to an ET report, approximately Rs 55,700 crore of unclaimed shares and dividends have been transferred to the government’s Investor Education and Protection Fund (IEPF) due to this issue. Shares and dividends become unclaimed if not claimed for seven consecutive years, whether in dematerialised or physical form.
These unclaimed securities are then transferred to the government’s IEPF, requiring investors or legal heirs to claim them back.
Sanchit Garg, co-founder of GLC Wealth, says that forgetfulness or lack of awareness about these investments are the primary reasons for securities remaining unclaimed.
Many individuals still hold shares in physical form, leading to challenges such as lost documents, address changes, dormant bank accounts, relocation, or decease. Recovering these investments can take one to three years, says Garg. This involves the consolidation of all relevant information and updating KYC details and account information.
To begin with, gather all pertinent information from records such as physical share certificates, dividends, allotment letters, and income tax returns. Ensure completeness by checking old investment records or notes. Update KYC details, signatures, and bank and demat account information in the company’s records. If share certificates are lost, apply for duplicate shares.
In the event of a deceased shareholder, legal heirs must handle the transmission process, including potential court proceedings based on investment value, as noted by Garg.
Following the issuance of an entitlement letter by the company, the legal heir must submit a claim via IEPF Form 5 on the MCA portal. Physical documents should be sent to the company for verification, after which the claim is approved, and shares are transferred to the legal heir’s demat account.
Market regulator Securities and Exchange Board of India (Sebi) has revealed that over 70% of demat accounts with single ownership lack nomination, creating hurdles for legal beneficiaries to access their shares and dividends.
According to an ET report, approximately Rs 55,700 crore of unclaimed shares and dividends have been transferred to the government’s Investor Education and Protection Fund (IEPF) due to this issue. Shares and dividends become unclaimed if not claimed for seven consecutive years, whether in dematerialised or physical form.
These unclaimed securities are then transferred to the government’s IEPF, requiring investors or legal heirs to claim them back.
Sanchit Garg, co-founder of GLC Wealth, says that forgetfulness or lack of awareness about these investments are the primary reasons for securities remaining unclaimed.
Many individuals still hold shares in physical form, leading to challenges such as lost documents, address changes, dormant bank accounts, relocation, or decease. Recovering these investments can take one to three years, says Garg. This involves the consolidation of all relevant information and updating KYC details and account information.
To begin with, gather all pertinent information from records such as physical share certificates, dividends, allotment letters, and income tax returns. Ensure completeness by checking old investment records or notes. Update KYC details, signatures, and bank and demat account information in the company’s records. If share certificates are lost, apply for duplicate shares.
In the event of a deceased shareholder, legal heirs must handle the transmission process, including potential court proceedings based on investment value, as noted by Garg.
Following the issuance of an entitlement letter by the company, the legal heir must submit a claim via IEPF Form 5 on the MCA portal. Physical documents should be sent to the company for verification, after which the claim is approved, and shares are transferred to the legal heir’s demat account.