Fate Of Unclaimed Financial Assets
@2018-01-06 06:46:37

Introduction

Recently, the media has been highlighting cases of unclaimed financial assets. On the 3rd of November 2017, the Business Daily reported that various institutions had surrendered financial assets belonging to several wealthy businessmen and politicians to the Unclaimed Financial Assets Authority.

The Unclaimed Financial Assets Act of 2011 defines “Unclaimed Assets” as assets which have been presumed abandoned and have been transferred to the Unclaimed Financial Assets Authority (UFAA).

Presumption of Abandonment

1. The following assets are presumed abandoned if the owner has not indicated interest in writing or transacted with them within two years:

1. Cheques & drafts;
2. Traveler’s cheques & money orders;
3. Refunds ordered by court;
4. Life or endowment insurance policies or annuity contracts;
5. Assets distributable in the course of the demutualization of an insurance company;
6. Assets distributable in the course of dissolution of any other business entity;
7. Assets held in a safe deposit box;
8. Assets held in a fiduciary capacity for the benefit of another person; and
1. Deposits for utilities.

2. Demand, savings and matured time deposit are presumed abandoned after five years if the owner has not transacted or communicated in writing with the financial institution concerning the assets.

3. Stock, shares, or other intangible ownership interests in a business entity are presumed abandoned if within three years the owner has not claimed or communicated with the holder regarding a dividend, distribution, or other sum payable as a result of the interest and the entity does not know the whereabouts of the owner.

4. A gift certificate, gift card, or credit memo is presumed abandoned if it has been claimed used for five years.

5. Unpaid wages and benefits owing in the ordinary course that remain unclaimed by the owner for more than one year after becoming payable are presumed abandoned.

6. Assets held for the owner by a court or a Government department are presumed abandoned if they remain unclaimed for more than one year after becoming payable or distributable.

Locating and Notifying Owners of Assets

A holder of unclaimed assets is required to make all reasonable efforts to locate the owner and to notify him about those assets. In addition, where the holder has the last known address of the apparent owner, it is required to send a written notice to that apparent owner informing him that it is in possession of assets.

This should be done within a period not less than sixty days and not more than one year before filing a report to the UFAA. If the assets remain unclaimed, the holder is required to deliver them to UFAA, and UFAA assumes custody and responsibility for the safekeeping of the assets.

Sale of Unclaimed Assets

UFAA is required sell unclaimed assets at a public auction within three years after the receipt, subject to a reserve price. At least three weeks before the auction, it should publish a notice in a newspaper of national circulation.

UFAA is required to sell securities listed on a stock exchange at the prevailing prices at the time of sale on the exchange.

Claims on Assets

A person claiming an interest in any assets paid or delivered to UFAA may file a claim. UFAA is then required to consider each claim within ninety days after it is filed and give written notice of its decision to the claimant. If the claim is allowed, UFAA is required to pay over or deliver to the claimant the assets or if the assets were sold, the amount it actually received from the sale. 

By: Edward Maroncha