Transfer of shares to IEPF Authority - clarification
With respect to transfer of shares to IEPF Authority, the Ministry of Corporate Affairs has issued General Circular No. 12/2017 dated 16thOctober, 2017. In terms of Rule 6 of the Investor Protection and Education Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended from time to time, where the seven year period provided under section 124(5) of the Companies Act, 2013 is completed during 7th September, 2016 to 31st October, 2017, the due date for transfer of such shares by companies shall be 31st October, 2017.
The following clarifications have been made in the abovementioned circular:
- Demat accounts have been opened by IEPF Authority with NSDL and CDSL through their depository participant;
- The said demat accounts will have features and functionality to support IEPF operations through paperless and digital processes;
- Companies required to transfer shares in such account shall do so whether such shares are held in dematerialised or physical form, by way of corporate action;
- The information related to shareholders, whose shares are being transferred to IEPF’s demat accounts shall be provided by the companies to NSDL or CDSL as per the prescribed format by the concerned depository;
- Separate discussions have been held by the MCA with NSDL and CDSL during which they have agreed to levy reduced charges on companies towards upload and maintenance of records pertaining to shares transferred to the special demat account of IEPF Authority. An MOU is being finalised to the effect which shall be uploaded on the website www.iepf.gov.in on finalization. Based on the same, the NSDL and CDSL shall notify the charges which shall not exceed those finalised in the MOU; and
- The cash benefits such as dividend, proceeds realised on account of delisting of equity shares, etc. accruing on account of shares transferred to IEPF shall be transferred by companies to bank account opened by the authority with Punjab national Bank and linked to the demat account mentioned in the abovementioned circular. Transfer of amount due to be transferred under section 125(2) of the Companies Act, 2013 or any other amount to aforesaid account is strictly prohibited.
The said circular is available on MCA
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