IEPFA Panel Recommends Simplified Claim Process for Small Investors’ Protection

The Investor Education and Protection Fund Authority (IEPFA), functioning under the Ministry of Corporate Affairs (MCA), has taken a significant step towards improving investor services by setting up a dedicated Committee on Simplification of Procedures for Low-Value Claims. The committee’s primary mandate was to review the existing processes and suggest reforms that can make claim settlements faster, transparent, and investor-friendly.

Purpose of the Initiative

Millions of investors, especially small and retail investors, face procedural hurdles while reclaiming their unclaimed dividends, matured deposits, or shares that have been transferred to the IEPF. Lengthy documentation requirements, technical complexities, and varying compliance conditions often deter investors, particularly senior citizens and small stakeholders, from claiming their rightful dues.

By focusing on low-value claims, the IEPFA aims to ease the burden on investors who are typically the most vulnerable and least equipped to handle complicated procedures. The reforms promise to:

• Reduce overall timelines for claim approvals.

• Enhance transparency and reduce discretionary interventions.

• Provide hassle-free services by minimizing redundant documentation.

Broad Representation in the Committee

To ensure the recommendations are well-rounded and practical, the Committee was composed of representatives from across the regulatory, professional, and industry spectrum, including:

• Ministry of Corporate Affairs (MCA)

• Investor Education and Protection Fund Authority (IEPFA)

• Securities and Exchange Board of India (SEBI)

• Institute of Chartered Accountants of India (ICAI)

• Institute of Cost Accountants of India (ICMAI)

• Institute of Company Secretaries of India (ICSI)

• Federation of Indian Chambers of Commerce and Industry (FICCI)

• PHD Chamber of Commerce and Industry (PHDCCI)

• Confederation of Indian Industry (CII)

• Registrar Association of India (RAIN)

This broad representation ensured that perspectives of regulators, professional bodies, and industry chambers were equally considered while framing the reforms.

Scope of the Recommendations

The Committee’s recommendations, once adopted, would apply to claims of smaller financial value, where procedural flexibility can significantly improve investor experience without compromising regulatory safeguards. Suggested thresholds include:

• Up to ₹5 lakh for physical securities.

• Up to ₹15 lakh for dematerialized (demat) securities.

• Up to ₹10,000 for dividends.

These reforms aim to ensure that investors do not face the same level of procedural scrutiny for small claims as they do for large-value claims, thereby striking a balance between ease of access and protection against misuse.

Expected Impact

If implemented, the reforms are expected to:

• Streamline documentation by introducing standardized forms and reducing duplications.

• Cut processing timelines, ensuring faster settlement of low-value cases.

• Build trust in the IEPFA system, encouraging more investors to come forward and reclaim their dues.

• Support financial inclusion by making investor protection mechanisms more accessible to common citizens.

Towards Investor-Centric Governance

The Committee’s work reflects the government’s ongoing efforts to foster an investor-friendly ecosystem in India. By reducing red tape and improving service delivery, these reforms would directly benefit small investors while also reinforcing confidence in the financial system.

Once the IEPFA formally adopts the recommendations, the revised procedures are expected to mark a landmark change in India’s investor protection framework, positioning the country’s regulatory system as more efficient, transparent, and citizen-centric.