SUBSCRIBE NEWSLETTER
  • Change Language
  • English
  • Hindi
  • Marathi
  • Gujarati
  • Punjabi
  • Tamil
  • Telugu
  • Bengali
  • MF News SEBI allows MFs to invest unclaimed redemption and dividend corpus in liquid funds

    SEBI allows MFs to invest unclaimed redemption and dividend corpus in liquid funds

    Fund houses to have a separate plan in a liquid fund meant exclusively for deploying unclaimed amounts.
    Ravi Samalad Feb 26, 2016

    From April 1, SEBI has allowed fund houses to invest the unclaimed redemption and dividend corpus in a separate plan of a liquid scheme which is meant exclusively for deploying unclaimed amounts. However, AMCs will not be allowed to charge any exit load in this plan and the TER will be capped at 50 bps.

    To ensure that mutual funds play a pro-active role in tracing the rightful owner of the unclaimed amount, SEBI has asked fund houses to publish a list of names and addresses of investors in whose folios there are unclaimed amounts. AMFI will also publish a consolidated list of such investors on its website.

    Also, fund houses will have to publish information about the process of claiming the unclaimed amount on their websites.

    Investors who claim the unclaimed amount during a period of three years from the due date will be paid initial unclaimed amount along with the income earned on its deployment. Investors who claim these amounts after three years will be paid the initial unclaimed amount along-with the income earned on its deployment till the end of the third year. After the third year, the income earned on such unclaimed amounts will be used for the purpose of investor education.

    Today, most investors opt to receive their dividend or redemption proceeds directly in their bank accounts through electronic clearing service (ECS). But there are instances where the dividend or redemption cheques return to the fund house because investors have not updated their address with the fund house.

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

    Click to clap
    Disclaimer: Cafemutual is an industry platform of mutual fund professionals. Our visitors are requested to maintain the decorum of the platform when expressing their thoughts and commenting on articles. Viewers are advised to refrain from making defamatory allegations against individuals. Those making abusive language or defamatory allegations will be blocked from accessing the web site.
    0 Comment
    Be the first to comment.
    Login or Sign up to post comments.
    More than 2,07,000 of your industry peers are staying on top of their game by receiving daily tips, ideas and articles on growth strategies. Join them and stay updated by subscribing to Cafemutual newsletters.

    Fill in the below details or write to newsdesk@cafemutual.com and subscribe to Cafemutual Newsletter now.
    Cafemutual is an independent media platform and focuses on providing knowledge and information for the benefit of finance professionals. We do not promote any particular brand or asset category.