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Unlocking IEPF Claim Procedure: Your Guide to Reclaiming Lost Shares

09, Oct 2023
Unlocking IEPF Claim Procedure: Your Guide to Reclaiming Lost Shares

Have you ever invested in shares on the Indian Stock Exchange and forgotten about them? There’s no need to get bothered as you’re not alone. Many investors are there who find themselves in a similar situation, leading to unclaimed or lost shares. But fear not, there's a solution! The Investor Education and Protection Fund (IEPF), established by the Indian government, aims to safeguard the interests of investors and raise awareness about their unclaimed dividends and shares. In this comprehensive guide, we'll walk you through the IEPF claim procedure, providing valuable insights and answers to the commonest FAQs that will ensure no difficulty will be raised at the nay phase of your claiming process.

 

Understanding the IEPF

 

The Investor Education and Protection Fund, or IEPF, is a crucial initiative created under Section 125 of the Companies Act 2013 by the Government of India. Its primary objective is to protect the interests of investors who may have dividends or shares lying unclaimed on the Indian Stock Exchange.

Here are the key points you need to know about IEPF:

 

IEPF Benefits

 

 Historically, companies used to transfer unclaimed dividends and shares to government funds, which were then utilized for various public welfare programs and development projects. However, the rise in unclaimed shares prompted the government to establish the IEPF. This program consolidates all unclaimed shares into a single platform, making it easier for investors to claim their dividends and shares.

 

Purposes of IEPF in India 

 

Before you delve into the process of IEPF shares claim procedure, it is essential to know what crucial purposes IEPF can serve. These are:

 

Investor Education: IEPF aims to enhance investor education and protection, ensuring investors know their rights and unclaimed assets.

 

Refund for Unclaimed Funds: If a corporation transfers unclaimed or underpaid funds to the IEPF, individuals have the right to request a refund from the IEPF Authorities.

 

Transferring Unclaimed Shares: Shares for which dividends have not been paid or claimed for more than seven years are transferred to the IEPF by corporations. The terms of this transfer are specified by the corporation.

 

Dematerialization of Physical Shares Dematerialization is the process of converting physical shares into digital form, complying with the regulations of the Securities and Exchange Board of India (SEBI).

 

IEPF Share Recovery Procedure

 

Let's break down the steps involved in the IEPF claim procedure in the following points.

 

  • Step 1: Check whether the company has completed the share transmission procedure and issued an entitlement notice.

  • Step 2: Complete Form IEPF-5 online on the official MCA website, providing all necessary information. Remember that only one claim can be made per year.

  • Step 3: After successful submission, you will receive an SRN number to track the status of yourIEPF claim procedure.

  • Step 4: Transmit the identical form along with supporting documentation to the Nodal officer for claim verification.

  • Step 5: Within 15 days of receiving the claim form, the corporation must provide a verification report to the Authority. Failure to do so within 30 days results in a penalty.

  • Step 6: Once the claimant's eligibility and verification report are confirmed, the IEPF Authority issues a sanction order for a refund of shares.

  • Step 7: The shares will be credited to the claimant's Demat account within 60 days after the company submits the verification report.


 

Documentation Needed for IEPF Share Recovery

 

To successfully retrieve shares from the IEPF, you'll need the following documents:

 

  • A copy of the acknowledgment (SRN number).

  • An indemnity bond.

  • Advance stamped receipt for IEPF shares.

  • Certificate for the return of bonds, debentures, or deposits that have matured.

  • Aaadhaar cards for all joint holders and the claimant.

  • PAN Card for unclaimed dividend transfer.

  • Passport, including OCI and PIO cards for foreigners and NRIs.

  • Share Certificate, Proof of Entitlement, and Cancelled Cheque.

  • Details of the verification report and bank account.

  • Information about the application, including the CIN number of the company.

  • Certificate of death for deceased joint holders ( if any)

 

Common Causes of Unclaimed Shares

 

Unclaimed share is a very common issue most of the time investors face. When proceeding with your IEPF claim process, you should also know why shares go unclaimed. Here are some common reasons:

1.    No Nominee: Many investors fail to designate a nominee, leading to complications when the shareholder passes away.

2.    Little Investments: Small investments often get overlooked or forgotten.

3.    Property Disputes: Shares can remain unclaimed when tied to property disputes that are unresolved by the court.

 

Conclusion

 

Protecting the investors' rights has always been an issue among investors that IEPF sorted out successfully encouraging shareholders to stay vigilant and claim their dividends promptly.

If you find yourself in possession of unclaimed or lost shares, don't hesitate to explore the IEPF claim procedure. Seek assistance from experts like Share Samadhan to simplify the process and achieve your financial objectives.

 

FAQs

 

1. How can I check if I have unclaimed shares in the IEPF? While you are in the IEPF claim process, you can check for unclaimed shares in the IEPF by visiting the official IEPF website and using the search facility provided.

2. Can I claim shares from the IEPF on behalf of a deceased family member? Yes, as a legal heir or nominee, you can claim shares from the IEPF on behalf of a deceased family member.

3. Is there a time limit for claiming shares from the IEPF? Yes, shares can be claimed from the IEPF within a specified time frame, so it's essential to initiate the process as soon as possible.

4. What happens if the company fails to provide a verification report within the specified time? If the company does not provide a verification report within the stipulated time, it may face penalties and consequences as per the relevant regulations.

5. Can I claim shares from multiple companies through a single IEPF claim? Yes, you can claim shares from various companies under a single IEPF claim, making the process more convenient for investors.

Can IEPF Share Ownership be Regained? Yes, you can reclaim your unclaimed or lost shares through the proper IEPF claim procedure. Whether you are the shareholder, joint holder, legal heir, or nominee, you have the right to initiate the process.

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