Unclaimed deposits and dividends: Govt revamps corporate disclosure regime
NEW DELHI : New Delhi: In a much-required revamp of corporate disclosures, the government has simplified the reporting process for companies on unclaimed dividends, deposits, and share application refunds—a move that will also further smoothen the claim process for investors. To reduce the compliance burden on companies, the ministry of corporate affairs in a recent order simplified how businesses need to report the transfer of unclaimed dividends and underlying shares to a fund maintained by the Investor Education and Protection Fund Authority (IEPFA).
This will also enhance the authority’s ability to process such data. For investors and their heirs, the government is working on a platform that will allow them to search the database to see if amounts owed to them by companies are lying with the Investor Education and Protection Fund.
The total balance amount in the IEPF was estimated to be about ₹5,600 crore as of 31 January 2023, as per the latest official data available. In 2022-23, up to 31 January, IEPFA had approved more than 8,200 claims and returned 6.6 million shares to investors.
An amendment to the IEPFA (Accounting, Audit, Transfer and Refund) Rules, effective from Tuesday, merges different forms and allows online transfers of amounts to the investor education and protection fund, allowing for smoother disclosures. Businesses are required to provide detailed reports to IEPFA on unclaimed dividends, which they must maintain in a separate account, and on the transfer of any amount or shares unclaimed for seven years to the investor education fund.
This reporting regime has now been modified. Also read | Can regulation technology address the compliance woes of banks? The ministry has merged the two forms into
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