If you or someone in your family owns shares, dividends or other investments made years or even decades ago, but you’ve lost track of them, the good news is you can still trace, claim and recover these assets legally. Thanks to the Investor Education and Protection Fund (IEPF) – a government authority that safeguards investments that remain unclaimed for years, and after proper verification, returns them to their rightful owners or legal heirs. Let’s find out how in this blog.
What are lost shares?
Generally speaking, lost shares refer to investments that you or your family once made in companies of your choice, but with time, you’ve forgotten about them, meaning they’re no longer actively tracked or claimed. This can happen for a variety of reasons, including the loss of physical certificates, change of your address, inactive bank accounts, or when the investor passed away without informing the family about the owned shares.
About IEPF and transfer of funds from companies to IEPF
IEPF is short for The Investor Education and Protection Fund. It’s a government authority under the Ministry of Corporate Affairs. It aims to facilitate the refunds of unclaimed shares and dividends. And it promotes financial literacy using awareness programs to safeguard interests of investors and to ensure transparency.
If dividends and shares once owned remain unclaimed for seven years in a row, the company then must transfer the unpaid dividends and related shares to IEPF. This is done to safeguard the interest of investors and prevent companies from the misuse of funds that have not been claimed for long.
That said, companies need to send reminders to investors before transferring the funds to IEPF, but if there’s no response, then transfer becomes mandatory. And about what kind of investments can be transferred, they could be unpaid dividends, equity shares, matured deposits, debentures or bonds etc.
If the original investor is still alive, they can claim following all legally defined steps. If the person who made the investments has passed away, their legal heirs, nominees or successor can still claim the investment after establishing their rightful relationship with the deceased investor and after completing all required verification processes.
A brief take on how to claim forgotten investments
The process is straightforward and it needs to be followed properly.
First of all, gather as much information about the investment as possible.
This includes the name of the shareholder, PAN number of the shareholder, Folio number (if available), name of the company, year of investment and any other relevant information.
Next, you can visit the company’s website to find if they have a section for unclaimed shares on their investors’ relations page. If you have a demat account, you can contact your Depository Participant and request them to check for any unclaimed shares in your name. You can also directly contact the company’s registrar to see if any such shares exist.
And to check if any shares or dividends have been transferred to IEPF, you can search the IEPF portal and by entering the required details, you may find the required information.
If you’ve identified shares that have been transferred to IEPF, filing a claim requires you to visit the IEPF portal, fill the Form IEPF-5 with correct details. Once the form is properly submitted, an acknowledgement will be generated. Take a printout of the filled in form and the acknowledgement.
Next, you must submit the physical documents to the company’s IEPF nodal officer. The company will then verify your claim and depending on the finding, IEPF will process the claim. If the claim gets successful, you will receive the refund into your bank account or the shares will be credited to your demat account.
Important things to remember and mistakes to avoid
The documents you submit for the claim should be accurate and complete, and according to the original investment records. Any error/s or missing information can delay the process or reject the claim altogether.
If the investment belongs to a deceased person, legal heir and succession documents must be correct and properly filled. Follow the steps carefully following all required processes.
Disclaimer: This blog is only for informational purposes. It does not constitute any type of legal, financial or investment advice. Any information mentioned here may change from time to time and can vary based on individual cases. Readers are advised to verify details from official sources or consult a qualified professional before initiating any claim.
Sanguine Capital offers a plethora of services related to the recovery of shares. If you are searching for more information about IEPF claims and/or want help with the claim process, please visit this page to learn more.