IEPF Authority has been actively engaged in discussions within the Financial Stability and Development Council (FSDC) to devise strategies for expediting refunds. Special attention has been given to cases where nominees are not readily identifiable, aiming to overcome such challenges through proactive measures.
To address the intricacies of the refund process, the IEPF Authority issued a consultation paper on January 9, 2023, inviting feedback from stakeholders. Drawing from insights garnered through this consultation and examining refund models from other regulators such as the Reserve Bank of India and the Securities and Exchange Board of India, the Authority proposes amendments to the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer, and Refund) Rules, 2016.
One significant proposal is to streamline the claim and refund process by relying on company verification. Under this proposal, upon submission of a claim, the Authority will transmit it to the respective company’s Nodal Officer for verification. The company will then assess the claim and, upon approval, initiate the refund process.
Key amendments include the addition of definitions for “Claims Refund Account” and “Shares Refund Account,” specifying the channels through which refunds will be processed. Furthermore, procedural guidelines outline the responsibilities of companies in verifying claims, appointing Nodal Officers, and communicating essential details to the Authority.
The proposed amendments also emphasize the importance of timely action, requiring companies to respond to claims within specified timelines. Failure to comply may result in penalties, ensuring accountability and expediting the refund process for claimants.
Moreover, the proposed procedural framework establishes clear guidelines for document submission, verification processes, and communication between companies and the Authority. By standardizing these procedures, the aim is to enhance transparency and efficiency in handling refund claims.
Through these proposed changes, the IEPF Authority endeavors to create a robust framework that simplifies the refund process while ensuring compliance with regulatory requirements. Stakeholders are invited to provide feedback on the proposed amendments, fostering a collaborative approach towards refining the refund process.
