How to claim unclaimed investments in Mutual Funds and Shares
Here is the procedure to claim unclaimed investments in Mutual Funds and Shares:
Mr. Lokesh Bhatt invested in mutual fund schemes in 2007. However, he did not inform about the investments to any of his family members. Unfortunately, in 2012, due to a major illness, he passed away leaving his family in a shock. As his family was not aware of the investments, the investments remained unclaimed until his son recently found the documents with respect to the investments. Other similar instances may also have taken place, resulting in a massive amount of unclaimed investments lying with the mutual fund houses.
The post below will help you to understand the details on unclaimed investments in mutual funds and shares & the procedure to claim such unclaimed investments.
Unclaimed Redemption/Dividend in case of Mutual Funds
An unclaimed redemption/dividend amount is the amount that remains unpaid to the investors beyond its validity period.
What happens to such unclaimed amount?
As per the SEBI guidelines, the unclaimed redemption/dividend amounts on mutual funds shall be invested in a plan of Liquid Scheme/Money Market Mutual Fund Scheme/Call Money Market/Money Market Instruments floated by mutual funds. AMCs are not permitted to charge any exit on such plan and the total expense ratio is capped at 50 bps.
How to locate the unclaimed Redemption/Dividend amount in Mutual Funds?
As per the circular published by SEBI in February 2016, it has been made mandatory for all the fund houses to disclose the details about the unclaimed redemption and dividends of all mutual fund schemes on their website with effect from April 01, 2016.
Mutual Fund Houses are required to provide the list of names and addresses of investors in whose folios there are unclaimed amounts on their website. Association of Mutual Funds in India (AMFI) on its website is also required to provide the combined list of investors across Mutual Fund industry, under whose folios there are unclaimed amounts. The information provided on the website shall contain the name of the investor, the address of the investor and the name of Mutual Fund(s) with whom the unclaimed amount is lying.
The investors may obtain the above information on unclaimed amount only upon providing their correct credentials such as PAN, date of birth, etc. Investors may also be required to go through the adequate security control measures being put in place by Mutual Fund/AMFI. Fund houses are also required to provide the information on the unclaimed amount along with its prevailing value to the investors separately in the periodic statement of accounts/consolidated statement sent to the investors. Investors can search their records using any of the details listed below:
• Folio Number
• Bank Account Number
• Date of Birth
• Mobile Number
• Email ID
Below is a screenshot from HDFC Bank website for your reference:
Procedure to claim unclaimed Redemption/Dividend amount in Mutual Funds:
The investors/unit holders can claim their unpaid amounts by filling the “Unclaimed Redemption/Dividend Claim Form”. The form should be duly filled and signed as per the mode of holding and submitted to the concerned Mutual Fund/AMC center along with the supporting document(s) such as Identity Proof and the documents in case of change of bank details/address/name or surname.
• Alteration in the form if any should be countersigned as per the mode of holding registered in the folio(s).
• Copies of all documents submitted should be self-attested and accompanied by originals for verification, or they should be attested by personnel/entities authorised for attesting as per KYC guidelines.
Investors claiming the unclaimed amounts during a period of three years from the due date will be paid initial unclaimed amount along with the income earned on its deployment. Investors claiming these amounts after three years will be paid initial unclaimed amount along with the income earned till the end of the third year. After the third year, the income earned on such unclaimed amounts will be used for the purpose of investor education.
Unclaimed Dividend on Shares
Prior to dematerialization of shares, they were held in physical form by the investors. Investors either use to forget about the investments or misplace the documents. So, if the investor does not claim the dividends on shares and the money continue to be with the companies for more than seven years, they are transferred to SEBI’s Investor and Education Protection Fund.
How to locate the unclaimed Dividend on Shares?
You can visit the respective fund house website to find the information on the unclaimed dividend. You will be taken to the Registrar & Transfer Agent (RTA) website for fund house like HDFC. While for others such as ICICI Bank, you can find the status of the unclaimed dividend on the bank website itself. You have to enter details such as your name as appearing on the share certificate/depository receipt, Folio Number/ DPID Client ID, Pin Code, etc. depending on the information asked by the respective fund house.
Below are the screenshots from ICICI Bank and HDFC Bank Limited RTA websites for your reference:
HDFC Bank RTA Website:
Procedure to claim unclaimed Dividend on Shares:
To claim unclaimed dividend within seven years from the declaration, you have to contact the respective fund house or the Registrar & Transfer Agent of the concerned fund house and provide them with the folio number, bank account number and KYC proofs. After the completion of seven years from the declaration of dividends, the company will transfer the money to the Investor Education and Protection Fund of the Ministry of Corporate Affairs (MCA). In such a scenario, the claimant will be required to contact the Ministry of Corporate Affairs (MCA).
If the person making a claim is a nominee, he/she has to provide the proof of being a nominee for the shares, indemnity bond, death certificate of the original shareholder, identity and address proof, pan card number.
It would be helpful if you keep a track of your investments on a regular basis. Do register your email for the updates from the mutual fund houses and do not forget to update your bank details in case of any changes for the direct credit of your investments.