In a discussion paper floated on Monday, the IPEFA proposed creation of a real-time online interface between the authority, the investors and the companies whose shares are being transferred.
“After the claim is filed by the claimant, the claimant and the company will be able to iterate the case between them online on real-time basis, till documentary requirements are complete,” said the discussion paper. “The IPEFA will enforce the timelines and the documentation procedure within which the company has to dispose the claim.”
The authority also suggested that a time frame be introduced for reclaiming such shares. As per the proposal, claimants would be able to reclaim their shares if they apply within the stipulated time. Thereafter, the authority would sell the shares and convert them into money and the claimants would get the sale value of shares instead of shares.
The proposal is aimed at enhancing investor protection as companies often undergo restructuring, including delisting, over the years.
“It can also be considered to bring a limitation threshold (in years, say 10 years from date of transfer of shares to authority) after which the authority can sell the shares to convert it into amount and the claimant can claim the amount so realized,” said the discussion paper.
According to the rules, in cases where investors have not claimed dividends for seven consecutive quarters, shares are transferred to the IPEFA and the original owners have to file claims with the authority to reclaim these shares and dividends.The proposal comes at a time when investors are facing significant delays in claiming IPEFA shares.
In the discussion paper, the IPEFA observed that in several cases there were delays on the side of companies in filing verification reports. It said it wants to bring in strict timelines for companies to file the verification report.