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Sebi's New Frameworks Make Claiming Unclaimed Amounts Easier for Investors

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The Securities and Exchange Board of India (SEBI) has introduced three frameworks to facilitate the claiming of unclaimed amounts by investors in various financial instruments. These frameworks cover non-convertible securities, Infrastructure Investment Trusts (InvITs), and Real Estate Investment Trusts (REITs). Read on to learn more about these new rules which will benefit investors.

The Securities and Exchange Board of India (Sebi) has recently released three frameworks to help investors claim unclaimed amounts that are due to them. These frameworks apply to investors in non-convertible securities, Infrastructure Investment Trusts (InvITs), as well as Real Estate Investment Trusts (REITs).

Under the new frameworks, listed entities must transfer unclaimed amounts to an escrow account within seven days of the due date. The entities must also appoint a nodal officer to handle investor inquiries and provide a search facility on their website to help investors track down their unclaimed amounts.

If an investor makes a claim for an unclaimed amount, the listed entity must release the funds to the investor within 30 days. If there is no claimant for seven years from the due date, the amount will be transferred to a fund called the Investor Protection and Education Fund (IPEF).

The new frameworks will make it easier for investors to claim unclaimed amounts and will help to ensure that investors are not deprived of their rightful funds.

Here are some of the key benefits of the new frameworks for investors:

Benefits of the New Framework

Increased Awareness and Accessibility

The new frameworks mandated by Sebi will enhance awareness among investors about the existence of unclaimed amounts and their right to claim them. The designated nodal officers and search facilities on listed entities' websites will simplify the process of locating and claiming unclaimed funds, making it more accessible to investors.

Efficient Claim Resolution

The streamlined procedures outlined in the frameworks will expedite the claim resolution process, ensuring that investors receive their unclaimed amounts promptly. The 30-day timeframe for releasing funds upon a valid claim significantly reduces the time investors must wait to access their rightful funds.

Enhanced Protection from Fraud

The establishment of nodal officers and the provision of search facilities will make it more challenging for scammers to impersonate legitimate claimants and steal unclaimed amounts. Investors can now rely on authorized representatives to handle their claims securely.

Promoting Investor Confidence

These measures taken by Sebi demonstrate a commitment to safeguarding investor interests and ensuring transparency in the financial system. By proactively addressing the issue of unclaimed amounts, Sebi is fostering greater trust and confidence among investors.