What are Unclaimed Investments ?

The savings of millions of shareholders lie around unredeemed in the form of physical share certificates (demats).. As per SEBI's recent fraud prevention circulars, numerous measures have been taken, including banning the transfer of physical share certificates and subsequent transfer of shares to the share Investor Education Protection Fund (IEPF) account on account of unclaimed dividends in the last seven years.

These shares cannot be traded until they are dematerialized or transferred from the IEPF account to your personal demat account.


Challenges in the dematerialization process

There are a number of issues that can hinder shareholders in dematerializing their physical shares, such as:


1. KYC updates: when it comes to establishing the identity of the shareholder, even the slightest difference in spelling or change of first or last name, or both, can become a major problem. In the past, when shares were purchased on the open market, the rules for matching transfer documents with valid proof of identity were not as strict. Today, however, shareholders must follow strict rules and procedures to prove their identity. They require a notice in the Official Gazette and newspaper advertisements if the differences are significant.


2. Name Correction: when it comes to establishing the identity of the shareholder, even the slightest difference in spelling or change in first or last name, or both, can become a major problem. In the past, when shares were purchased on the open market, the rules for cross-checking transfer documents with valid proof of identity were not as strict. Now, however, shareholders must follow strict rules and procedures to prove their identity. They require a notice in the Official Gazette and newspaper advertisements if the differences are significant.


3. Common ownership of shares: The problem with common ownership is that all common holders must simultaneously give their consent and comply with the formats of the RTAs when it comes to KYC updates, name corrections, dual issuance of shares, and retrieval of shares from the IEPF account. It becomes a bigger problem when one or more co-owners pass away.


4. Inconsistent signatures: This problem is relatively common and is noted by almost all shareholders. The writing flow changes with age and time, leading to signature changes.


5. Loss of share certificates: There are situations where the shareholder has lost the certificates due to wear and tear or negligence. Shareholders must apply to their respective RTAs for duplicate share certificates after meeting the indemnity and affidavit formats; there are several levels of review for this.


6. Investor Education Protection Fund (IEPF): as per SEBI's latest circular, the shares of a shareholder who has not claimed dividends for seven consecutive years will be transferred to the IEPF account.


The IEPF has its own formats, rules and procedures to be followed.


Although the regulations and strict filtering were put in place to prevent fraudulent claims by shareholders, they have now caused problems and led to borderline harassment.


The silver lining is that shareholders can get a refund of their unclaimed investments or shares transferred to IEPF by the company based on the provisions of Section 124 of the Companies Act, 2013 and the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016.


The procedure for recovery of shares from IEPF


1. Applicant submits an application to the Authority

Any applicant who wishes to receive a refund or recover the shares on its behalf must submit the IEPF-5 FOrm on the MCA Portal. The form should contain the following information.


A. Information about the applicant

B. information about the entity and the amount due

C. Information about the shares to be claimed

D. Information on the dividends to be claimed

E. Aadhar number or passport/OCI/PIO card number if the applicant is an NRI or a foreign national

F. Details of the bank account linked to the Aadhar

G. Demat account number


2. Submitting the application to the company

After submission of IEPF-5 form, the applicant shall send a copy of the form in an envelope marked 'Application for Reimbursement from IEPF Authority' along with the following documents to the Nodal Officer/RTA of the Company:


  • A hard copy of the form with the signature.

  • A copy of the receipt with SRN number.

  • The original of the indemnity bond with a signed non-judicial stamp paper in the amount specified in the Stamp Act.

  • Original advance receipt signed by the applicant and witnesses with stamp.

  • Original share certificates or a copy of the transaction report.

  • Aadhar card.

  • Credentials such as share certificate or application number of interest certificate, etc.

  • Passport or Overseas citizen of India (OCI) or Person of Indian Origin (PIO) card in case of NRIs or foreigners.

  • Cancelled cheque.

  • Copy of Demat's customer master list.


3. Submission of the application by the company to the IFFP authority

Once the applicant's application is received, the company must prepare an audit report within 15 days of receipt of the application and submit it to the PSI authorities along with the applicant's documentation.


4. Reimbursement by the IEPF authorities to the applicant


Within 60 days of receiving the verification report from the company concerned, the IFFP authority must decide on the applicant's request for reimbursement.

It shall issue a refund notice if the applicant is entitled to the shares with the approval of the relevant authority. The IFFP and the official in charge of subscription and disbursement, after verifying the claimant's entitlement, send an invoice to the Payroll Officer for payment. Subsequently, the shares are credited to the applicant's demat account.


Our team tracing who are share investor, unclaimed investment person and help to recover from IEPF with 100% guaranteed.For any assistance and advice regarding physical share certificates, Connect with our Relationship Manager at- +91 93103 03046 or Visit Our Website:- www.glcwealth.com


shares investors
Location: Delhi, India

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