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Come April 1, India's mutual fund houses would have to upload list of investors on their websites whose dividends and redemption amount remained unclaimed with the fund players. Further, fund houses would have to disclose to the investors the value of such unclaimed amounts on their periodic statement of accounts.
In a circular today, the capital market regulator Securities and Exchange Board of India (Sebi), said that the unclaimed redemption and dividend amounts can also be invested in a separate plan of liquid scheme or money market scheme floated by fund houses specifically for deployement of such unclaimed amounts. Thus far, the unclaimed amount could be deployed only to call money market or money market instruments.
Further, the regulator said that no exit load should be charged to the rightful owner of the unclaimed amount and that the total expense ratio or TER of such specific plans should be capped at 50 basis points.
The industry body Association of Mutual Funds in India (Amfi) too would be required to publish the consolidated list of such investors across the industry containing investors' names, addresses and the fund house unclaimed amount is lying with.
Sebi said that investors who claim the unclaimed amounts during a period of 3 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 3 years will be paid 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 shall be used for the purpose of investor education," said Sebi in its circular.
Giving a relief with an immediate effect to the new cadre of investors who, thus far, were allowed only to sell simple and performing mutual fund products, the regulator said that such products can also comprise retirement benefit schemes having tax benefits and liquid schemes/ money market mutual fund schemes.
