How to trace and recover unclaimed shares and dividends: Complete guide and FAQs

Unclaimed shares and dividends, securities that investors lose track of, are transferred to the Investor Education and Protection Fund (IEPF) after seven years. However, the good news is that investors can still claim them through a clear and straightforward process.

How can investors recover their unclaimed shares or dividends?

First, investors have to trace their unclaimed shares or dividends. IEPFA helps them in this by providing a facility to search for unclaimed shares, dividends or deposits on its website.

Investor Education and Protection Fund Authority (IEPFA), under the Ministry of Corporate Affairs (MCA), protects investors by educating them about their financial rights and facilitating refunds for their unclaimed shares, dividends and deposits.

• Go to the IEPFA portal (www.iepfa.gov.in)
• Select ‘Click here for login and registration to “IEPF Search Facility”’
• Create an account if you’re not registered already, or log in through your credentials
• Search for your securities using PAN/Basic Information/Company Name and Demat ID, Folio Number

If your details match any entry on IEPFA’s database, the system will list it for you.

Now, to claim a refund from IEPF, investors have to apply to IEPFA by filing the web form IEPF-5 and submitting the necessary documents.

• Go to the MCA website (www.mca.gov.in)
• Navigate to MCA services and go to IEPF-related services
• Here, you will find the IEPF-5 Web Form

After filing Form IEPF-5, the signed copy, along with other necessary documents, must be sent physically to the company’s Nodal Officer, and a postal receipt of the same must be uploaded on the IEPFA portal.

Other than Original Indemnity Bond, KYC documents, original share certificates, original cancelled cheque/first page of passbook, copy of client master list (CML) of the demat account of claimant and affidavit (and other supporting documents), claimants can refer to Schedule II of IEPF (AATR) Rules 2016 and Schedule III of IEPF (AATR) Rules 2016 to check additional required documents.

The IEPF-5 is self-explanatory, and no professional help is needed to file the form. Moreover, an instruction kit is available on the IEPF website, and claimants can also visit the IEPF office for assistance.

• Read the instructions on the MCA website carefully, alongside downloading the form.
• Ensure you have all accurate details regarding your unclaimed investments (such as Folio no/Client ID, Company name/Company Identification Number (CIN), Number of shares/unclaimed dividend, other details like PAN, Aadhaar, bank account details and demat account details)
• Find and file in the IEPF-5 Web Form online with complete details.
• After submitting the form, you will receive a unique SRN (Service Request Number). Keep this SRN for future correspondence.
• Print the signed and attested IEPF-5 form, along with the received acknowledgement and the Auto-generated Indemnity Bond.
• Send these documents (along with required documents such as original share certificates, identity proof, etc.) to the Nodal Officer (IEPF) of the company at its registered office.
• The postal dispatch receipt must be uploaded as proof of sending the documents to the MCA portal.

Now, your claim will appear on the Company’s Nodal Officer Dashboard under Pending Action. The company will verify the claim and submit a verification report. Based on the company’s report, the IEPFA will process the claim. If your claim is approved, you will receive the refund electronically into your bank account, or the shares will be credited to your demat account.

Individuals must ensure that all documents are accurate, complete and signed, and copies of all documents and SRN are saved. For verification status, claimants can follow up with the company’s nodal officer.

To understand this in detail, let’s look at important FAQs.

What are unclaimed shares?

As per Section 124(6) of the Companies Act 2013, shares that are not claimed for seven consecutive years, or shares on which a dividend isn’t paid for seven consecutive years, are unclaimed shares. These shares shall be transferred by the company to the IEPF.

Unclaimed shares are investments that owners lose track of, due to various circumstances, including:

• Change in bank accounts
• Change in address
• Change in phone numbers
• Death of a shareholder
• Forgotten investments
• Demat issues

When is an unclaimed dividend transferred to IEPF?

Unpaid dividends are transferred to the Investor Education and Protection Fund (IEPF) within seven years from the date of initial transfer to the Unpaid Dividend Account of a company.

“If any money transferred to the Unpaid Dividend Account of a company (under section 124(1)) remains unclaimed or unpaid for a period of 7 years from the date of such transfer, then the company shall transfer the amount along with interest accrued, if any, to the Investor Education and Protection Fund (IEPF), which is established under Section 125 of the Companies Act, 2013,” as per Section 124(5) of Companies Act, 2013.

Are there any charges for filing a refund claim?

No, there are no charges for filing a refund claim on IEPFA.

What if your original share certificates are lost?

Original share certificates are mandatory for the IEPF claim process. If the original certificates are lost, the claimant must follow the procedure outlined in Schedule III of the IEPF (AATR) Rules, 2016:

If the market value of the claimant’s unclaimed investments exceeds ₹5,00,000, a self-attested copy of FIR or police complaint containing details of the security holder, security holdings, folio number and distinctive share certificate numbers will be mandatory for the process. Also, if the value exceeds ₹5 lakh, a copy of a public notice/advertisement published in a widely circulated newspaper about the loss of securities will also be needed.

“Indemnity bond by security holder on a non judicial stamp paper of requisite value duly attested by Notary Public by the person, in whose name the original share certificate are being issued that he has not sold/disposed off the involved [securities] or acted in any manner by which any interest of third party would have been created,” according to the Finance Ministry’s booklet titled ‘Your Money, Your Right’.

In case of NRIs, other necessary documents will be required for claiming the securities, including a passport, proof of overseas address, etc.

What if there’s a mismatch in details?

If there is a minor mismatch in details or documents, like spelling or abbreviation variations, claimants would be required to submit an affidavit along with a self-attested copy of any identity proof to the Registrar and Transfer Agent (RTA).

In case of a major mismatch, like a name change, additional documents would be required, like a marriage certificate or publication of the name change in the official gazette.

Claim rejection

After receiving a claim, the company must verify the claim and send an online verification report to the IEPF Authority within 30 days of receiving the claim. If the company fails to do so, a late fee of ₹50 per day must be paid, up to a maximum of ₹2,500.

If the IEPFA doesn’t receive the verification report and necessary documents within 60 days, it may reject the claim after informing both the claimant and the company through the registered email address. The company must furnish a response within 15 days.

In case of missing information or corrections, the IEPFA will notify the claimant and company through email and provide the claimant a chance to provide corrections within 15 days. If the claimant fails to provide the required information, the claim may be rejected.

After the claimant submits the additional information, the company shall send a revised verification report. If information is requested from the company, it shall provide a revised report within 30 days.

How can investors avoid dividends and shares from being transferred to IEPF?

To avoid your investors from being transferred to IEPF:

• Check your dividend payments in your bank account regularly.
• Update bank account details.
• Ensure your KYC is updated with your bank.

How to submit grievances?

To submit a grievance related to IEPFA, investors can follow these steps:

• Visit www.iepf.gov.in
• Under services, click on ‘raise ticket’
• Select ‘Create Service Related Complaints’
• Fill in the required details

While complaints can’t be submitted through email, investors can call the IEPFA toll-free helpline at 14453. Users can also visit the IEPFA office from 9:30 am to 3:30 pm, Monday to Friday and the Public Relations Officer (PRO) for assistance.

Investors can also file complaints through the Centralised Public Grievance Redress and Monitoring System (CPGRAMS).

Many other important details regarding the transmission of shares can be found in the Finance Ministry’s booklet, including the process in Schedule II of IEPF Rules (AATR) 2016.