The Ministry of Corporate Affairs, on 14th August 2019 notified the second amendment rules sanctioned for the Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund). The Amendment simplifies the process of filing certain forms with the IEPF Authority.
Key Amendments made under the Rules are as follows:
A. Changes in Definition:
- Definition of “Company” under the Rules now includes transferee company in respect of assets and liabilities of transferor companies.
- Definition of “corporate action” has been made inclusive instead of specific. Corporate actions pursuant to amalgamation and other methods can now be included in the definition.
- Definition of “investor” has been omitted.
B. Rule 5(1) has been substituted. The new sub-rule specifies that any amount required to be credited by the companies to the Fund shall be remitted online along with a Statement in Form No. IEPF 1, containing details of such transfer to the Authority within a period of 30 days of such amounts becoming due to be credited to the Fund. Sub-rules 2,3, and 4 have been omitted.
C. Deployment of New eform IEPF-1A: After Sub-rule 4 of Rule 5, a new sub-rule has been inserted.
- Form IEPF-1A will enable reporting by the companies which have transferred any amount either to IEPF or the CG pursuant to section 205C of the Companies Act, 1956 but have not filed the statement or have filed the statement in any format other than in excel template within sixty days of notification of these amended rules.
- The company shall maintain the record filed in the format as contained in Form IEPF-1 along with all supporting documents and the Authority shall have the powers to inspect such records.
D. Amendment in timeline and format of eForm IEPF – 2
Every company is required to furnish and upload on its own website and also on website of Authority or any other website as may be specified in form IEPF-2, within a period of sixty days of holding of AGM or the last date on which it should have been held whichever is earlier and every year thereafter till completion of 7 years. Earlier, the requirement was to file within 90 days from AGM.
E. While effecting the transfer of shares to IEPF, the company shall send a statement to the Authority in Form No. IEPF-4 Within thirty days of the corporate action and the company shall also attach a copy of the public notice published under clause (a) of sub-rule (3) of rule 6 in Form No IEPF-4.
F. All benefits accruing on such shares like bonus shares, split, consolidation, fraction shares and except right issue shall also be credited to the DEMAT account of IEPF by the company which shall send a statement to the Authority in Form No. IEPF-4 within 30 days of the corporate action containing details of such transfer.
The following Schedules have been inserted through this amendment:
- The current schedule has been renamed as schedule 1, which prescribes the registers and books to be maintained by the authority.
- Schedule II: This schedule prescribes the documentary requirement for transmission of securities held in physical mode as well as in DEMAT mode.
- Schedule III: The schedule prescribes documents like copy of FIR/Police compliant, surety affidavit etc required to be submitted to the Authority in case of loss of securities held in physical form.
- Schedule IV: This schedule prescribes the indicative procedure that may be followed by the Authority while disposing claims from the claimants.
The Amendment has come into force from the 20th of August, 2019 except Rules 6 (i), 6 (iv), 6 (v), 6(vi), 6(vii) and 6 (viii) which will come into force on 20th of September.
Click here to read amendment.
