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The Government should set up a centralised authority to handle and process unclaimed private assets on the lines suggested for creating the Central Authority for Unclaimed Property, the SC appointed-committee to probe Hindenberg-Adani saga said in its report.
According to the committee’s findings, there are unclaimed shares amounting to ₹47,000 crore and cash totaling nearly ₹5,200 crore. The Investors Education and Protection Fund Authority (IEPFA) is manned by a CEO holding additional charge and has a dozen officers.
However, the committee believes that the current officer strength is disproportionately small. Therefore, the IEPFA should have a full-time Chief Executive Officer who would be held accountable with specific key performance indicators established by the governance oversight of the Authority.
The IEPFA has acknowledged that the refund process involves multiple stakeholders, and the main service providers operate on different electronic platforms that are not interoperable. As a result, the data flow is not seamless, and the refund process exceeds the legally mandated time period. An efficient market relies on the ability of market participants to make informed investment decisions, which includes awareness of the ecosystem as well as the associated risks, rewards, rules, and regulations.
F&O segment
The SC appointed committeesaid there has been a substantial increase in the futures and options segment which entails higher risk and specialised knowledge of the market.
Most of the investors have entered the segment perceiving it as a quick way to make money, mostly working on tips from brokers, said the report submitted by the committee.
Data on delivery-based trades executed by individuals, their trading contribution to the F&O segment and the number of demat accounts with zero holdings, points to such individuals having a high-risk appetite and them being more traders than investors.
On the disclosure front, it said offer documents and prospectus issued at the time of listing in compliance with the ICDR (Issue of Capital and Disclosure Requirements) Regulations run into several hundreds of pages, which begs the question as to whether investors actually read these documents.
In the spirit of improving investor awareness, the Committee focused on highly neglected area — the framework in which unclaimed securities, dividends and bank deposits are handled.
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