The Securities and Exchange Board of India (SEBI), the country’s capital markets regulator, has unveiled a comprehensive framework for addressing unclaimed funds held by entities with listed non-convertible securities, real estate investment trusts (REITs), and infrastructure investment trusts (InvITs). The framework, which also details the process for investors to claim such unclaimed amounts, will be implemented on March 1, 2024.
SEBI’s latest initiative aims to establish a consistent and streamlined procedure for investors to recover unclaimed funds, enhancing their convenience and ease of access. The regulatory move follows SEBI’s approval of rule amendments related to the disclosure of the Investor Protection and Education Fund (IPEF), real estate investment trusts (REITs), and infrastructure investment trusts (InvITs) by SEBI’s board in September.
According to the circulars issued by SEBI, the framework defines the handling of unclaimed funds within REITs, InvITs, and escrow accounts of listed entities (non-corporate). It outlines the transfer of such unclaimed amounts to the Investor Protection and Education Fund (IPEF) and the procedure for investors to claim these funds.
Additionally, SEBI has standardized the processes to be followed by listed entities, REITs, and InvITs for the transfer of unclaimed amounts to escrow accounts. Investors are also provided with guidelines on how to make claims for their unclaimed funds. This standardization promotes a smoother and more efficient experience for investors.
Under the new rule, investors are encouraged to directly approach the debt-listed entity, REIT, or InvIT to claim their unclaimed funds. The framework ensures minimal disruptions in the process, making it easier for investors to recover their unclaimed amounts.
Moreover, the rules stipulate that any unclaimed amount remaining in escrow accounts for a period of seven years will be transferred to the Investor Protection and Education Fund (IPEF). By doing so, SEBI seeks to enhance the protection and education of investors while ensuring that unclaimed funds are handled in a well-defined and structured manner.
SEBI’s proactive approach to unclaimed funds within the capital markets is in line with its commitment to investor protection and regulatory excellence. The framework provides greater clarity and transparency in handling unclaimed amounts, safeguarding the interests of investors in India’s financial markets.