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.