|MCA introduces changes to IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2021
The Ministry of Corporate Affairs (MCA) has notified a new set of rules for Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) this year. It shall come into force as on the date of its publication in the Official Gazette.
Highlights of Rules, 2021:
- Insertion of a new clause (fa) in Rule 3 sub-rule 2
- Insertion of new Rule 6A- Manner of transfer of shares to the fund under Subsection (9) of Section 90 of the Act
- Revision in e-Forms IEPF-4 & IEPF-7
Insertion of a new clause (fa) in Rule 3 sub-rule 2
In addition to the existing list of amounts that shall be credited to the fund (Rule 3, sub-rule 2), it will also include the amount specified under Section 90(9) and the resultant benefits arising from such shares also to be credited.
Insertion of new, Rule 6A- Manner of transfer of shares under subsection (9) of Section 90 of the Act to the fund
- The shares shall be credited to DEMAT Account within 30 days of such shares becoming due;
- The procedure shall be deemed to be that of transmission of shares;
- No application shall be filed for claiming back such shares from the Authority;
- Board to authorize Company Secretary or any other person to sign the necessary documents;
- The detailed procedure for transfer of shares via depository & physical form is provided in the amended rules;
- Company to preserve copies for its records;
- Company shall send a statement to the Authority in Form No. IEPF-4 within 30 days of the corporate action, along with the relevant documents as required;
- voting rights on shares transferred to the fund shall remain frozen, as per SEBI regulations, 2011, the shares transferred to the Authority shall be considered while calculating the total voting rights;
- Company to maintain all such statements filed along with all supporting documents and Authority shall have the powers to inspect such records;
- All benefits accruing on the shares except right issue shall be credited to such DEMAT account (Company to intimate the Authority in Form IEPF-4 within 30 days of the corporate action containing details of transfer);
- In case of delisting, Authority shall surrender shares in accordance with SEBI (Delisting of Equity Shares) Regulations, 2009 and the same to be credited to the fund and a separate ledger account shall be maintained;
- In case of winding up, Authority may surrender the securities and receive the amount on behalf of the security holder and credit the same in a separate ledger account;
- Dividend received to be credited to the fund and a separate ledger account to be maintained;
- The amount credited by the companies to the fund as provided under sub-rules (9), (10) and sub-rule (11) shall be remitted into a specified account of the IEPF Authority maintained in the Punjab National Bank (and intimate the Authority in Form No. IEPF-7 within 30 days from the date of remittance);
- Authority shall furnish its report to the Central Government in case of non-compliance with the rules.
Revision of Forms IEPF-4 & IEPF-7
Substitution of e-Forms IEPF-4 and IEPF-7 with the updated versions of the same to enable the requirement of filing the said e-Forms according to the requirements introduced through Rule 6A of IEPFA (Accounting, Audit, Transfer and Refund) Rules, 2016.