The Securities and Exchange Board of India (SEBI) has extended the deadline for submitting public suggestions on new rules regarding unclaimed funds and securities held by brokers. These funds have been left unclaimed by investors.
SEBI had released a consultation paper on February 11, 2025, asking for public feedback until March 4, 2025. Now, the deadline has been extended to March 31, 2025, to allow more people to share their opinions.
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What Are Unclaimed Funds and Securities?
According to SEBI’s consultation paper, if a customer’s money or securities are not deposited in their bank or demat account and the customer cannot be contacted, their account will be placed under ‘enquiry status.’ Any funds in such an account will be considered unclaimed.
Additionally, if securities remain with a trading member for over 30 days, they will be classified as ‘unclaimed securities.’
Steps to Find the Customer
SEBI has instructed brokers to make efforts to contact the customer using letters, emails, phone calls, or other available means. If the customer cannot be reached, the broker should try contacting:
1) The introducer of the client
2) The nominee of the client
3) The employer of the client
4) Any other relevant person whose details are available
However, brokers must ensure they do not share any financial or investment-related information with others.
Purpose of the New Rules
The main goal of these new rules is to prevent the misuse of unclaimed funds and securities and ensure they reach the rightful owners. SEBI believes that these steps will improve market transparency and investor security.
Efforts to Locate the Customer
SEBI has instructed brokers to make reasonable efforts to contact the customer. They must use available communication methods such as:
Letters
Emails
Phone calls
If the customer remains untraceable, the broker should try to reach out to:
The introducer of the client
The nominee of the client
The employer of the client
Any other relevant person whose details are available