The US Securities and Exchange Commission (SEC) has approved new rules making it essential for broker-dealers to carry out searches for holders of securities with whom they have lost contact.
Recordkeeping transfer agents, who are the intermediaries between the clearing house and the broker-dealer are already complying a similar rule in the country.
The market regulator has given its nod to extend the rule to broker-dealers based on the recommendation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
According to the new laws, broker-dealers and other securities market participants will have to essentially provide notifications to persons who have not processed cheques that they received in connection with their securities holdings.
SEC chairman Elisse Walter said, "For the first time, broker-dealers will have a duty to reach out and find those they have lost touch with."
"Among other things, it will make it more likely that investors will get the money that they may not have realized is owed to them," Walter added.
The amendments will become effective 60 days after the date of publication of the release in the Federal Register, while the compliance date will be one year after the date of publication.