A Complete Guide on Guidelines for Recovery of Shares in India

Guidelines for Recovery of Shares
Karan Singh
| Updated: Dec 08, 2022 | Category: Recovery of Shares

The Securities & Exchange Board of India has simplified guidelines for investor service requests, comprising establishing a framework for providing PAN, KYC details, signature, bank details, the concern of duplicate shares, change of status for NRIs, nomination description & other information by holders of physical shares. The Securities & Exchange Board of India has also advised RTAs & Corporations to execute such requests using papers received through registered emails & e-signature. Scroll down to check the important guidelines for the Recovery of Shares in India.

Recovery of Unclaimed Shares from IEPF in India – Guidelines for Recovery of Shares

SEBI has made it vital for all physical shareholders to provide their PAN, nomination (for all eligible folios), contact details, bank account details & specimen signature; if any of the documentation is not accessible, then RTA will freeze the Folio on or after 1st April, 2023. Recovery of Shares in India has become the easiest & fastest process due to the Government of India’s latest guidelines & investors’ friendly regulations; these days, one can easily access IEPF unclaimed shares funds.

It further specifies that the frozen accounts will be submitted to the administering authorities under the Benami Transactions (Prohibitions) Act, 1988 & possibly the Prevention of Money Laundering Act, 2002,[1] if they remain frozen until December 31, 2025. In the purview of the new legislation, it is vital that all holders of physical shares start the process of amending their details in the Company’s records & recovering their shares as soon as possible.

Filing of Unclaimed Shares for Recovery of Shares from IEPF in India

A Shareholder whose unclaimed dividends, debentures, stocks, or debentures, application money to be reimbursed & interest on it, if any, money raised of fractional shares, etc. is transmitted to the IEPF can claim the shares etc., is transmitted to the IEPF can claim the shares as per the procedure laid down in sub-section (6) of Section 124 or can apply under Clause (a) of sub-section (3) of Section 125.

Note: If the claimant is the legal heir, successor, or nominee of the registered shareholder, he or she must guarantee that the firm completes the process of transmission 7 and issues an entitlement letter to the legal heirs before filing the IEPF claim with the authorities.

Process of Recovery of Shares – Guidelines for Recovery of Shares in India

An individual who wants to claim shares back is required to submit an IEPF Form-5 to MCA with the following details:

  1. Applicant’s details;
  2. Details of the Company;
  3. Details of the shares to be claimed;
  4. Amount of the dividend to be claimed;
  5. If the applicant is an Indian Citizen, then the Aadhar Number is required and if the applicant is a foreigner or an NRI, then they are required to provide their passport or PIO Card number;
  6. Once the online refund form is completed, the claimant must email the same to the Company’s nodal officer along with vital documents. The following documents need to be attached:
  7. Copy of the acknowledgement with the SRN;
  8. Original indemnification bond with claimant’s signature;
  9. Original advance stamped receipt with claimants’ & signature of witnesses;
  10. Original Certificates in case of matured deposit or debenture being refunded;
  11. Proof of entitlement;
  12. Self-attested copy of your DEMAT accounts’ client master list;
  13. The responsible firm is required to prepare a verification report within 15 days of receiving the claim form & transmit it to the authorities in the prescribed format;
  14. The Drawing & Disbursing Officer shall dispatch a bill to pay & the account officer for payment based on the guidelines for Recovery of Shares after the completion of the claimants’ entitlement verification;
  15. The authority shall issue an order of refund sanction with the permission of the competent authority if the claimant is entitled to shares;
  16. The shares would be credited to the claimant’s DEMAT Account or to the extent of the claimant’s entitlement. In case the shares are physical certificates, the duplicate certificates will be annulled & the shares will be handed to the claimant.
  17. The authorities obtain the reimbursement application of the claimant validated by the Corporation.
  18. The authorities are required to decide within 60 days or 2 months of receiving the verification report from the relevant firm.

Conclusion

After discussing the Guidelines for the Recovery of Shares, it is concluded that the Ministry is seeking legal change to make it easier for businesses to transfer their stock to the Government. The change, as per Authorities, will streamline the share transfer procedure and address the problem of unclaimed dividends. The MCA is pressing for a change to the Firms Act that would allow the Government of India to take over the work of transferring shares from companies.

Read our Article:Procedure for Recovery of Shares from IEPF in India

Spread the love
Karan Singh

A legal writing enthusiast, a wanderer, and a zealous reader. After gaining a lot of knowledge about the diverse legal topics and developing research skills, Karan joined the league of legal content writers to deliver quality-rich blogs.

docsbizkit
 

Related Articles

Form IEPF-5
| Date: Dec 09, 2022 | Category: Recovery of Shares

What is Form IEPF-5?

The Investor Education and Protection Fund were instituted by the Central Government to protect the interests of investors and create awareness among investors. The Investor Education and Protection Fund, or...

Read More
Transmission of Shares and Transfer of Shares
| Date: Dec 02, 2022 | Category: Recovery of Shares

Difference between Transmission of Shares and Transfer of Shares

A transfer is an act of movement of an asset or the passing of ownership in certain assets either voluntarily and by the act of parties or by the operation...

Read More
Refund Shares from IEPF
| Date: Dec 29, 2022 | Category: Recovery of Shares

What is the Process to Get Refund Shares from IEPF?

There are two aspects of profits earned by a company the first one is dividends, and the second one is retained earnings. In general concept, the term 'dividend' is used...

Read More

ARTICLES

Hi! My name is Akanksha! Let's talk.