On October 24, 2025, the Securities and Exchange Board of India (“SEBI”), through its Department of Debt and Hybrid Securities, has released a consultation paper (“Consultation Paper”) proposing amendments to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”). The Consultation Paper seeks to clarify and streamline the timelines for transfer of unclaimed amounts relating to listed non-convertible securities to the Investor Education and Protection Fund (“IEPF”) or the Investor Protection and Education Fund (“IPEF”), in order to align the LODR framework with the Companies Act, 2013 and the corresponding IEPF Rules, 2016.
The move forms part of SEBI’s continuing efforts under its Ease of Doing Business initiative to simplify compliance requirements and bring consistency across different legal frameworks governing listed debt instruments.
Currently, Regulation 61A of the LODR Regulations requires the listed entities to transfer any unclaimed interest, dividend, or redemption amount to an escrow account within 7 (seven) days after it remains unclaimed for 30 (thirty) days. If the amount continues to remain unclaimed for 7 (seven) years, it must be transferred to the IEPF (for companies) or IPEF (for other listed entities).
However, this provision does not explicitly consider whether the underlying debenture or instrument has matured before such transfer to the IEPF/ IPEF. In contrast, Section 125(2) of the Companies Act, 2013, read with Rule 3(3) of the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016, provides that any unclaimed interest and matured debenture amounts are to be credited to the IEPF only after 7 (seven) years from the date of maturity.
This has led to interpretational inconsistencies, as the LODR requirement may result in transfer of unclaimed interest before maturity contrary to the intent of the Companies Act.
Proposed Amendment
To resolve this inconsistency, SEBI has proposed to substitute the existing Regulation 61A(3) of the LODR Regulations with a revised provision stipulating that:
- Unclaimed amounts lying in the escrow account shall be transferred to the IEPF in accordance with Section 125 of the Companies Act and the applicable Rules, i.e., after 7 (seven) years from the maturity date of the debenture or instrument.
- For listed entities that do not qualify as ‘companies’ under the Companies Act, the unclaimed amount remaining after 7 (seven) years from maturity shall be transferred to the IPEF constituted by SEBI under Section 11 of the Securities and Exchange Board of India Act 1992.
- No interest shall accrue on such amounts transferred to IEPF/IPEF.
The proposed alignment is aimed at ensuring uniformity between the LODR framework and the Companies Act regime, thereby preventing premature transfer of unclaimed interest and promoting regulatory clarity.
SEBI has invited public comments from market participants and stakeholders on whether the proposed amendment to Regulation 61A(3) of the LODR Regulations is appropriate and adequate, latest by November 14, 2025.