Sebi allows investment of unclaimed dividend in liquid funds

MUMBAI: The Securities and Exchange Board of India( Sebi) has allowed fund houses to invest unclaimed redemption and dividend amounts in a separate plan of liquid schemes.

The regulator on Thursday said asset management companies should not charge any exit load and the total expense ratio of such plans have been capped at 50 basis points.

Fund houses and industry body AMFI would have to provide the list of names of investors in whose folios there are unclaimed amounts.

"Investors who claim the unclaimed amounts during a period of three years from the due date shall be paid initial unclaimed amount along-with the income earned on its deployment. Investors, who claim these amounts after 3 years, shall 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 on such unclaimed amounts shall be used for the purpose of investor education,"Sebi said in a circular.

As on November 30,2014,around Rs 510.56 crore and Rs 345.12 crore of unclaimed dividend and redemption amount that belongs to nearly 27.7 lakh mutual fund folios was held by mutual fund industry.