The Ministry of Corporate Affairs (MCA), in exercise of the powers conferred by sub-sections (1), (2), (3), (4), (8), (9), (10) and (11) of section 125 and sub-section (6) of section 124 read with section 469 of the Companies Act, 2013 vide Notification no. G.S.R. 854(E) dated 5th September, 2016 had notified Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 with effect from 07.09.2016. It prescribed amounts that shall be credited to IEPF Fund under section 124(5) along with process to be followed for transfer of shares to DEMAT Account of IEPF Authority in pursuance of section 124(6).
Above notified rules were amended via Notification no. G.S.R. 178(E) dated 28th February, 2017-Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 with effect from 28.02.2017. Through this amendment MCA had clarified:
- In cases where the period of seven years provided under section 124(5) has been completed or being completed during the period from 7th September, 2016 to 31st May, 2017, the due date for transfer of such shares shall be deemed to be 31st May, 2017.
- The shares shall be credited to DEMAT Account of the IEPF Authority to be opened by the Authority for the said purpose.
Guidelines for company for transfer of shares:
- The company shall inform, at the latest available address, the shareholder concerned regarding
transfer of shares three months before the due date of transfer of shares and also simultaneously publish a notice in the leading newspaper in English and regional language having wide circulation informing the concerned that the names of such shareholders and their folio number or DP ID -Client ID are available on their website duly mentioning the website address.
- Where the shares are dealt with in a depository, the Company shall inform the depository by way of corporate action, where the shareholders have their accounts for transfer in favour of the Authority.
- Where the shares are held in physical form-
- The Company Secretary or the person authorised by the Board shall make an application, on behalf of the concerned shareholders, to the company, for issue of duplicate share certificates;
- on receipt of the application under clause (a), a duplicate certificate for each such shareholder shall be issued and it shall be stated on the face of it and be recorded in the register maintained for the purpose, that the duplicate certificate is “Issued in lieu of share certificate No….. for purpose of transfer to IEPF” and the word “duplicate” shall be stamped or punched in bold letters on the first page of the share certificate;
- Particulars of every share certificate issued as above shall be entered forthwith in a register of renewed and duplicate share certificates maintained in Form No. SH-2 as specified in the Companies (Share Capital and Debentures) Rules, 2014;
- After issue of duplicate share certificates, the company shall inform the depository by way
of corporate action to convert the duplicate share certificates into DEMAT form and transfer
in favour of the Authority.
- The company shall make such transfers through corporate action and shall preserve copies for its
- While effecting such transfer, the company shall send a statement to the Authority in Form No.
IEPF 4 containing details of such transfer.
Important for Shareholders-
Under provison to section 124(6), any claimant of shares transferred u/s 124(6), shall be entitled to claim the transfer of shares from Investor Education and Protection Fund in accordance with procedure and on submission of documents prescribed under rule 7 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017.
- Notification no. G.S.R. 854(E) dated 5th September, 2016
- Notification no. G.S.R. 178(E) dated 28th February, 2017
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