Unclaimed Shares Explained: What You Need to Know to Reclaim Your Investments

Have your parents or grandparents had the habit of investing money in stock markets? Then there is a possibility of having dividends which were never claimed. They aren’t alone, there are several investors, who remain unaware of the fact that a prime portion of their investment could go unclaimed.  As investment plays a huge role in financial planning, you must be aware to protect your wealth from loss and use it effectively. To solve this issue, here, in this blog, we will throw light on the fact of recovering unclaimed shares. Our step-by-step guidance will help you learn the process related to this.

Unclaimed Shares: A Growing Concern

In the Indian financial market, several options are available for the investors. Stock market investment is one such option. But sometimes the rightful owners don’t claim their shares, due to many reasons. In such cases, when an investor doesn’t cash a dividend cheque, before it becomes invalid, the amount is noted as unclaimed. To keep that wealth protected, and to return it to the rightful owner,  there is a respective financial institution named IEPF (Investor Education and Protection Fund).

In general cases, unclaimed shares are automatically transferred to the IEPF, after a certain period of time. Then, this organization which is controlled by the Ministry of Corporate Affairs, carry out the responsibility of preserving unclaimed shares, and returning them to the lawful owners.

What Is The Reason Behind the Rise Of Unclaimed Shares?

There are multiple reasons behind the rise of unclaimed shares. The prime reason behind this is the unawareness or the negligence of shareholders to claim their shares.  It may seem awkward that an investor may forget or overlook this matter, but this actually happens. Unclaimed shares remain active in the company’s record, but they can’t be managed by anybody, even the rightful owners. To regain that control, they must apply to the IEPF, by following several steps. After a prolonged process of verification, IEPF can return this power of control, in case the applicant has been proven as the rightful owner.

Some common factors, that are largely responsible for the rise of unclaimed shares in the Indian financial market are:

• The sudden death of the investor with no information to inheritors
• Negligence of the investor
• Change in address
• Misplaced or damaged physical share certificate
• Inadequate communication
• Uncashed dividend cheques
• Non-updation of bank details

The Role of IEPF In Preserving Investors’ Assets

IEPF was established with the aim of keeping the investors’ wealth protected from permanent loss. It also educates them about their financial investments and safeguards their investments against fraudulent activities in the financial market. They manage the unclaimed shares and return them to the rightful owners. It includes a regulatory framework that facilitates the promotion of financial literacy, the handling of unclaimed shares, dividends, mature deposits and other unclaimed assets.

If shareholders don’t claim their shares within the given period of seven years, their shares are automatically transferred to the IEPF. Until the rightful owner comes forward to claim that, the assets are kept safely by the IEPF. Before transferring the unclaimed share to the IEPE, the company to which the share belongs, sends a notification through email, letters or public notice, to the shareholder about the transferring of shares. Still, if the company don’t get any response from the investor’s side, they transfer the shares to the IEPF and, the identity of the shareholder is kept in the record.

Unsure About the Status of Your Investment?

If you are unaware of the status of your investment, you can check it by following some simple steps. At first, you need to review your investment records including dividend cheques, old statements, and correspondence from companies, where you have invested your money. If you don’t find any recent updates about your investments, then there may be a possibility of unclaimed shares.

In the next step, you need to enter online portals to search for your unclaimed shares, by typing your name and company’s name from which the share belongs. For best results, you may consider the matter of seeking help from expert financial institutions, who offer help to check the status of your investment.

Processes Of Reclaiming Your Unclaimed Shares

The IEPF claim process may be a daunting task. That’s why, here, we have described the process step by step.

• Check the status of your share first. You can do this by checking your own investment record or using online portals.
• Keep your necessary documents in arranged conditions.
• File your claim by entering the official website of IEPF and filing and submitting the IEPF -5 form, which is available online.
• After the submission of the form, IEPF will start the process of verification. Depending on the complexity of the claim, it may take some time. For clarification, they may ask you for additional documents.
• If you are proven as the rightful owner, the IEPF will initiate the transfer of the unclaimed shares back to your demat account.

Several challenges are associated with this process. The most common challenge is the incomplete or incorrect documentation. Another significant challenge is the complexity of proving your entitlement, especially when you are applying on behalf of your deceased relatives. Another important challenge is the time-consuming verification process. The verification process takes much time, and very often it requires additional information or documents. One must keep patience to deal with these challenges.

Wrapping Up 

To avoid complexities related to IEPF Unclaimed Shares, it is advisable to seek help from professionals like Infiny Solutions. With our prolonged experience and expertise, we will guide you through the entire process of reclaiming your shares. Our comprehensive approach will reduce your stress and make the whole process easier. We are not just a service provider, we are your trusted partner in your journey to reclaiming shares. Depending on the complexity of the claim, we provide tailored solutions to each client that bring success. Connect with us to experience the difference!