CAIRR Update November 09, 2023

09/11/2023

Summary of the SEBI Circular dated 08/11/2023

This circular is integrated in our free-to-use website ca2013.com.

SEBI vide this Circular provides a procedural framework for dealing with unclaimed amounts lying with entities having listed non-convertible securities and the manner of claiming it by the investors

1. A listed entity having non-convertible securities is mandated to transfer the interest/ dividend/ redemption amount which was not claimed within 30 days from its due date to an escrow account withing 7 days from the expiry of the said period of 30 days.

2. A need to standardize the procedure to be followed by the listed entities was felt and hence SEBI through this circular has defined the framework for the same in Annexure- A annexed to it.

3. Further, the amounts in the Escrow account which remain unclaimed for 7 years are to be transferred to-
   • the ‘Investor Education and Protection Fund’ (IEPF) constituted in terms of section 125 of the Companies Act, 2013 – in case of listed entities which fall under the definition of Company under Companies Act and rules; and
   • the ‘Investor Protection and Education Fund’ (IPEF) created by the Board in terms of Section 11 of the Act – in case of listed entities which are not companies as per Companies Act, 2013.

4. The said circular through Annexure B defines the procedure to be followed by the listed entities (which are not companies) for transfer of such unclaimed amounts from the Escrow Account to the IPEF and claim thereof by the investors.

5. Further, listed entities having unclaimed amounts in the Escrow Account for less than 7 years, as on February 29, 2024, have been directed to start computing interest, as stated in Annexure A, from March 1, 2024; and

6. The listed entities which are not companies, having unclaimed amounts in the Escrow Account for more than 7 years, as on February 29, 2024, have been directed to transfer the unclaimed amounts of the investors to IPEF, as per the provisions set out in Annexure B, on or before March 31, 2024.

   Click here to view the SEBI Circular