The (Sebi) has created a new framework for handling stocks that stock brokers and unclaimed money held to safeguard investors’ interests.
The total amount of unclaimed monies and unclaimed securities was Rs 323 crore and Rs 182 crore, respectively, as of January 31. In some instances, the transfer of securities may not be possible because of inaccurate or missing information about the demat account or because the clients of their legal heirs and nominees cannot be traced.
According to the regulator’s proposal, accounts would be placed in “inquiry status” if the client cannot be reached or the funds cannot be credited to their bank account.
In addition to upstreaming such monies to clearing organizations, the brokers must reach out to the clients using every available method. The securities in “inquiry status” will be considered unclaimed if they remain with the broker for more than 30 days.
The monies will be moved to the selected stock exchange’s specialized bank account every quarter if not claimed within a year. Unclaimed monies will be sent to the Investor Protection Fund (IPF) after three years with the stock exchange.
On their websites, stock exchanges and brokers will offer a search function for clients, nominees, and legal heirs to inquire about stocks and unclaimed money.
Before the monies and securities are moved to the designated bank account or the IPF, Sebi has also laid down the procedure that must be followed. It has also suggested the claim’s procedure and deadlines.
The market regulator suggested a new technology named Mutual Fund Investment Tracing and Retrieval Assistant (MITRA) in December 2024 to allow investors to monitor the folios of dormant mutual funds.
