IEPF Authority seeks suggestion to simplify claims refund process

New Delhi, Jan 17 (KNN) To simplify and expedite claims settlement process, the Investor Education & Protection Fund Authority (IEPFA) has invited comments from all stakeholders.

Some of the suggestions in the consultation paper include a Real time Online interface between IEPFA, Claimant and Company.

After the claim is filed by the Claimant, the Claimant and the Company will be able to iterate the case between them online on real time basis, till documentary requirements are complete and case is considered for final approval by the company.

IEPFA will enforce the timelines and the documentation procedure within which the Company has to dispose the claim, said the paper.

Cases, claims are proposed to be categorised according to their nature (Loss cases, Transfer, Transmission, Death Cases, Name Change etc.) and also on the threshold of their market value. Certain type of claims below a threshold, for the same shareholder/investor, where there are minor changes like address change, bank account number change can be made STP (Straight Through Process) based on approval report of the company.

Documentary requirement can be further relaxed with the Authority continuing to process the claim above the threshold and doing share transfer and amount transfer to claimant.

This will resolve the issue of rejection of the cases at the end of company and will provide real-time status and monitoring of the case to all stakeholders.

For Shares transferred through Reverse Corporate Action, it has been suggested that after the approval, share and amount will be transferred by the Authority to the respective company through reverse corporate action, which in turn will transfer the same to respective claimants.

Company will be responsible to transfer the shares and amount to claimant through corporate action, once it is received by it from IEPFA. The Authority will enforce the timelines through penalties and interest.

In view of limitation threshold, the consultation paper states that it can also be considered to bring a limitation threshold (in years, say 10 years from date of transfer of shares to Authority) after which the Authority can sell the shares to convert it into amount and the claimant can claim the amount so realized.

This can be considered as a measure of Investor Protection as Companies undergo many corporate restructurings including merger, demerger, delisting etc. Also, in case of such restructuring or in case company fails or become insolvent, the value of the share gets eroded. After a period of limitation (say 20 or 25 years), the claims can be considered time barred.

The last date for receiving comments is January 27, 2023 and the suggestions may be offered through via email at iepfa.consultation@mca.gov.in

The Notice inviting comments and the Consultation paper have been uploaded at https://www.iepf.gov.in/bin/dms/getdocument?mds=WSLjMLDPdRipeC0%252BcgeW0w%253D%253D&type=open.  (KNN Bureau)