SEBI’s Consultation Paper: New rules for unclaimed funds and securities

The Securities and Exchange Board of India (SEBI) has projected a caller mechanics to negociate unclaimed funds and securities lying with trading members (TMs).

With unclaimed lawsuit funds reaching Rs 323 crore and securities worthy Rs 182 crore arsenic of January 2025, SEBI aims to guarantee these assets are returned to rightful owners efficiently.

What are unclaimed funds and securities?

Under the projected definition:

• Funds oregon securities that could not beryllium credited to a client’s slope oregon demat relationship owed to incorrect details oregon inactivity volition beryllium classified arsenic "unclaimed."
• Clients who cannot beryllium reached wrong 30 days volition person their assets tagged arsenic unclaimed.

Steps to find investors

Brokers and exchanges volition person to marque proactive efforts to find the rightful owners. They must:

• Contact investors via letters, emails, and telephone calls.
• Reach retired to introducers, nominees, employers, oregon relatives.
• Maintain records of attempts to hint investors.

How volition unclaimed assets beryllium handled?

For unclaimed funds:

• Within 30 days: Funds volition beryllium kept successful fixed deposits (FDs) oregon overnight liquid schemes.
• After 1 year: Funds volition beryllium transferred to a designated banal speech (DSE).
• After 3 years: Funds volition beryllium moved to the Investor Protection Fund (IPF).

For unclaimed securities:

• Within 7 days: Securities volition beryllium pledged to a peculiar relationship nether the designated banal exchange.
• If unclaimed for 3 years: Securities volition beryllium retained nether a peculiar class for capitalist claims.

What happens if a broker defaults?

If a broker defaults oregon surrenders membership, unclaimed shares volition beryllium transferred to the banal exchange. These securities volition beryllium pledged successful a peculiar relationship until the capitalist is found. No charges volition beryllium levied for managing these assets.

SEBI’s propulsion for tracking unclaimed assets

SEBI is besides integrating integer solutions like:

• MITRA (Mutual Fund Investment Tracing and Retrieval Assistant) to way inactive communal money folios.
• DigiLocker integration for demat accounts to heighten capitalist entree to holdings.

Investor benefits and aboriginal outlook

This inaugural ensures that capitalist assets stay protected and accessible. By leveraging exertion and regulatory oversight, SEBI aims to importantly trim the fig of unclaimed funds and securities successful the market. The consultation insubstantial is unfastened for nationalist feedback until March 4, 2025.