Section 125 of Companies Act, 2013 – Investor Education and Protection Fund

SECTION 125. INVESTOR EDUCATION AND PROTECTION FUND

[Sub-section(5), (6) [except with respect to the manner of administration of the Investor Education and Protection Fund which is effective from 7th September, 2016] & (7) effective from 13th January, 2016 , Sub Section (1) to (4) and (8) to (11) effective from 7th September, 2016]

(1) The Central Government shall establish a Fund to be called the Investor Education and Protection Fund (herein referred to as the Fund).

(2) There shall be credited to the Fund—

(a) the amount given by the Central Government by way of grants after due appropriation made by Parliament by law in this behalf for being utilised for the purposes of the Fund;

(b) donations given to the Fund by the Central Government, State Governments, companies or any other institution for the purposes of the Fund;

(c) the amount in the Unpaid Dividend Account of companies transferred to the Fund under sub-section (5) of section 124;

(d) the amount in the general revenue account of the Central Government which had been transferred to that account under sub-section (5) of section 205A of the Companies Act, 1956 (1 of 1956), as it stood immediately before the commencement of the Companies (Amendment) Act, 1999 (21 of 1999), and remaining unpaid or unclaimed on the commencement of this Act;

(e) the amount lying in the Investor Education and Protection Fund under section 205C of the Companies Act, 1956 (1 of 1956);

(f) the interest or other income received out of investments made from the Fund;

(g) the amount received under sub-section (4) of section 38;

(h) the application money received by companies for allotment of any securities and due for refund;

(i) matured deposits with companies other than banking companies;

(j) matured debentures with companies;

(k) interest accrued on the amounts referred to in clauses (h) to (j);

(l) sale proceeds of fractional shares arising out of issuance of bonus shares, merger and amalgamation for seven or more years;

(m) redemption amount of preference shares remaining unpaid or unclaimed for seven or more years; and

(n) such other amount as may be prescribed:

Provided that no such amount referred to in clauses (h) to (j) shall form part of the Fund unless such amount has remained unclaimed and unpaid for a period of seven years from the date it became due for payment.

(3) The Fund shall be utilised for—

(a) the refund in respect of unclaimed dividends, matured deposits, matured debentures, the application money due for refund and interest thereon;

(b) promotion of investors’ education, awareness and protection;

(c) distribution of any disgorged amount among eligible and identifiable applicants for shares or debentures, shareholders, debenture-holders or depositors who have suffered losses due to wrong actions by any person, in accordance with the orders made by the Court which had ordered disgorgement;

(d) reimbursement of legal expenses incurred in pursuing class action suits under sections 37 and 245 by members, debenture-holders or depositors as may be sanctioned by the Tribunal; and

(e) any other purpose incidental thereto, in accordance with such rules as may be prescribed:

Provided that the person whose amounts referred to in clauses (a) to (d) of sub-section (2) of section 205C transferred to Investor Education and Protection Fund, after the expiry of the period of seven years as per provisions of the Companies Act, 1956 (1 of 1956), shall be entitled to get refund out of the Fund in respect of such claims in accordance with rules made under this section.

Explanation.—The disgorged amount refers to the amount received through disgorgement or disposal of securities.

(4) Any person claiming to be entitled to the amount referred in sub-section (2) may apply to the authority constituted under sub-section (5) for the payment of the money claimed.

(5) The Central Government shall constitute, by notification, an authority for administration of the Fund consisting of a chairperson and such other members, not exceeding seven and a chief executive officer, as the Central Government may appoint.

(6) The manner of administration of the Fund, appointment of chairperson, members and chief executive officer, holding of meetings of the authority shall be in accordance with such rules as may be prescribed.

(7) The Central Government may provide to the authority such offices, officers, employees and other resources in accordance with such rules as may be prescribed.

(8) The authority shall administer the Fund and maintain separate accounts and other relevant records in relation to the Fund in such form as may be prescribed after consultation with the Comptroller and Auditor-General of India.

(9) It shall be competent for the authority constituted under sub-section (5) to spend money out of the Fund for carrying out the objects specified in sub-section (3).

(10) The accounts of the Fund shall be audited by the Comptroller and Auditor- General of India at such intervals as may be specified by him and such audited accounts together with the audit report thereon shall be forwarded annually by the authority to the Central Government.

(11) The authority shall prepare in such form and at such time for each financial year as may be prescribed its annual report giving a full account of its activities during the financial year and forward a copy thereof to the Central Government and the Central Government shall cause the annual report and the audit report given by the Comptroller and Auditor-General of India to be laid before each House of Parliament.

Applicable Rules

Investor Education and Protection Fund Authority (Appointment of Chairperson and Members, holding of meetings and provision for  office and officers) Rules, 2016.

[Effective from 13th January, 2016]

Rule 2. Definitions:– ( l) In these rules. unless the context otherwise requires,

(a) “Act” means the Companies Act 2013;

(b) “Authority” means the Investor Education and Protection Fund Authority constituted under sub-section (5) of section 125 of the Act

(c) “Chairperson” means the chairperson  of the authority appointed under  rule (5) of these rules;

(d) “Company” means company as defined in sub-section (20) of section 2 of the Act and includes ‘corresponding new bank’ as defined in sub-section (d) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) and clause (b) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980)

(e) “Fund” means the Investor Education and Protection Fund (IEPF) established under section 125 of the Act:

(f) “Investor” means any person. who has committed money in shares, or debentures, bonds or deposits under a scheme or plan of a company registered under the Act;

(g) “Member” means members of the authority appointed under sub-section 6 of section 125 of the Act; and

(h) “Section” means the section of the Act.

(2) Words and expressions used in these rules and not defined herein but defined in the Act or in the Companies (Specification of Definitions Details) Rules, 2014, shall have the same meaning respectively assigned to them in the Act or in the said rules.

Rule 3. Establishment of the Authority.- The Authority shall be established on such date as may be notified by the Central Government.

[1][“Rule 3A. The Authority shall be a body corporate by the name aforesaid having perpetual succession and a common seal with power to acquire, hold and dispose of property, both movable and immovable, and to contract and shall, by the said name, sue or be sued.”]

Rule 4. Composition of the Authority- ( l ) The Authority shall consist of the following, namely:-

(a) Chairperson

(b) six members

(c) Chief Executive Officer

(2) The Chief Executive officer shall be the convenor of the Authority.

Rule 5. Chairperson of the Authority- The Secretary, Ministry of Corporate Affairs shall be the ex-officio Chairperson of the Authority.

Rule 6. Chief Executive Officer of the Authority.- The Central Government shall appoint a person to be the Chief Executive Officer of the Authority.

Rule 7. Members of the Authority:- The Central Government may appoint the following as the members of the authority namely:-

(i) a person not below the rank of Executive Director to be nominated by the Reserve Bank of India as ex-officio member;

(ii) a person not below the rank of the Executive Director to be nominated by the Securities and Exchange Board of lndia as ex-officio member;

(iii) four persons having special knowledge and experience of not less than fifteen years. in finance, management, accountancy or law with one person from each discipline and such person shall have special knowledge, or professional experience, which shall in the opinion of the Central Government shall be useful to the Authority.

Rule 8. The term of office of members of the Authority :-

( l) The members of the Authority appointed under clause (iii) of rule 7 shall hold office for a period of three years  and shall be eligible for reappointment; Provided that no member shall hold office for more than three terms. Provided further that a member shall be eligible for reappointment or expiration of cooling off period of three years after his term.

(2) Notwithstanding anything contained in sub-rule (1), the Central Government shall have the right to terminate the services of a member appointed under clause (iii) of rule 7, at any time before the expiry of the period specified under sub-rule (1), by giving him notice of not less than three months notice in writing for reasons mentioned in sub-rule (4), and a member shall also have the right to relinquish his office, at any time before the expiry of the period specified under sub-rule (l), by giving to the Central Government notice of not less than three months in writing.

(3) The members appointed under clause (iii) of rule 7 shall hold office for a period of three years or till attaining the age of 65 years whichever is earlier.

(4) The Central Government shall remove a member from office if he-

(a) is, or at any time has been, adjudicated as insolvent;

(b) is of unsound mind and stands so declared by a competent court;

(c) has been convicted of an offence which in the opinion of the Central Government involves a moral turpitude:

(d) has, in the opinion of the Central Government, so abused his position as to render his continuation in office detrimental to the public interest.

Provided that no member shall be removed under this sub-rule unless he has been given a reasonable opportunity of being heard in the matter.

Rule 9. The number of officers and employees of the Authority:- The Authority shall have such number of officers and other employees for rendering secretarial assistance and for its day to day functions as are set out in Schedule I to these rules.

Rule 10. Functions of the Authority.- (1) Subject to the provision of the Act, the Authority shall have the duty to administer the Fund for Investor Education and Protection.

(2) The general management of the affairs of the Authority shall vest in the Chief Executive Officer, who may exercise powers. which may be authorised by the Authority.

(3) The Chief Executive Officer shall function under superintendence and direction of the Chairperson.

(4) Without prejudice to the generality of the provisions, the functions of the Authority shall include the following namely:-

(a) The Authority may constitute permanent Committees for overseeing its functions;

(b) Each Committee shall comprise two members, Chief Executive Officer and concerned functional head who shall be the secretary of the Committee. The Committee shall be headed by an ex-officio member;

(c) The Committee may invite experts with special knowledge and expertise, as and when required to assist it on any specific issue;

(d) The Authority may outsource, if required,  work related to Funds and Shares Management.

(c) The broad functional divisions of the Authority shall be as per Schedule II to these rules.

Rule 11. Meetings :- (1) The Authority and its Committees shall meet at such times and places as it may consider necessary.

(2) The Authority and its Committees shall determine its own procedure for holding of meetings.

(3) If the Authority or its Committees has to hold a meeting elsewhere than in New Delhi, the approval of the Chairperson of the Authority shall be obtained indicating the reasons thereof.

(4) The Authority and the Committees shall meet at least once in a quarter and at least four such meetings shall be held in a financial year;

Provided that not more than one hundred and twenty days shall intervene between two consecutive meetings.

(5) The meeting of the Authority shall be presided over by the Chairperson.

(6) If for any reason, the Chairperson is unable to attend a meeting, any other Member chosen by the Members present from amongst themselves at the meeting shall preside over the meeting.

(7) In case of difference in opinion on any question before the Authority, or any of its Committees, the views of the majority shall be taken as the final decision.

(8) More than fifty percent appointed Members of the Authority shall constitute the quorum for the transaction of business at a meeting of the Authority.

(9) Two members of a Committee shall constitute the quorum for the transaction of business at a meeting of the Committee.

( 10) For journeys performed by a non-official member of the Authority or Committee or a special invitee in connection with the work of the Authority or Committee, the actual expenditure for attending the meeting shall be reimbursed, subject to maximum of such expenditure limit applicable to a Senior Administrative Grade Officer of Government of India.

Rule 12. Member not to participate in meetings in certain cases:- A member, who has any pecuniary interest, direct or indirect in any matter that is brought up for consideration at a meeting of the Authority and its Committees, shall, as soon as possible after relevant circumstances have come to his knowledge, disclose the nature of his interest at such meeting and such disclosure shall be recorded in the proceedings of the Authority and its Committees, and the member shall not take any part in any deliberation or decision of the Authority and its Committees with respect to that matter.

Rule 13. Vacancies, etc., not to invalidate proceedings of Authority:- No act or proceeding of the Authority and its Committees shall be invalid merely by reason of-

(a) any vacancy in, or any defect in the constitution of the Authority and its Committees;

(b) any defect in the appointment of a person acting as a member of the Authority and its Committees;

(c) any laches in the procedure of the Authority and its Committees not affecting merits of the case.

Rule 14. Protection of action taken in good faith.- No suit, prosecution or other legal proceedings shall lie against the Central Government or Authority or any officer of the Central Government or any member, officer or other employee of the Authority for anything, which is in good faith done or intended to be done under these rules.

Schedule I

S.NO.	Designation	Pay Scale	Number of Posts
1.	General Manager	PB-4 + GP Rs. 8700	01
2.	Assistant General Manager	PB-3 + GP Rs. 5400	01
3.	Senior Accounts Officer	PB-3 + GP Rs. 5400	01
4.	Assistant Accounts Officer	PB-2 + GP Rs. 4800	02

 

Schedule II

Functional Divisions of the Authority

(l) Administration:

(i) Establishing equipping, maintaining and operating administrative functions as may be necessary or deemed expedient for fulfilling the objects of the Fund.

(ii) Authority and committees of Authority related matters.

(2) Investment/ Funds Management:

(i) Maintaining funds standing to the credit of Fund, investing the same in interest bearing account of any nationalised Bank.

(ii) Opening of depository account of authority and transferring into the account securities of investor and transferring to investors account securities upon settlement of the claim.

(3) Claims and Settlement:

(i) Making refunds to eligible investors after following the due procedure in respect of claims lodged by investors in accordance with clause (a) of sub-section (3) of section 125 of the Act and rules made thereunder.

(ii) Distribution of disgorged amount as per the order of the court or the Authority.

(iii) Distribution of the disgorged amount in consultation with Legal and Enforcement Division, to eligible and identified security holders who have suffered losses due to any wrong actions of any person in accordance with the order of Tribunal or order of the Authority, as the case may be. The amount to be distributed shall be limited to the amount disgorged in respect of any particular order and no other funds can be used for distribution.

(4) Legal and Enforcement:

(i) Initiation of legal cases against non-compliant companies or persons.

(ii) Handling disputes and legal cases arising out of claims or settlement or any other dispute.

(iii) Reimbursement of funds from Fund for meeting legal expenses incurred in pursuing class action suits  under section 37 and 245 of the Act by members, debenture holders or depositors as sanctioned by Tribunal in accordance with the procedure prescribed in this regard.

(5) Investor Education and Protection:

(i) Registering associations or institutions or professional bodies or chambers of commerce and industry or other organisations engaged in investor education and protection activities.

(ii) Sanctioning grants to the registered entities for seminars, programmes, projects or activities in the field of corporate governance, Investors’ Education and Protection including research activities.

(iii) Monitoring of the utilisation of the grants to ensure the achievements of the objectives of the sanctioning of the grants.

(iv) Cooperating and collaborating with institutions engaged in lnvestor Education, corporate governance, awareness, and protection activities.

(v) Conducting on its own or in collaboration with entities engaged in lnvestor education and protection or academic institutions or other regulated entities like Stock Exchanges, Depositories, Banks and Mutual funds nationwide investors’ education and awareness programmes including seminars and symposia.

(vi) Setting up of institutional arrangements or infrastructure for taking up programmes, projects and action plans keeping in view the objectives and expenditure relating thereto, including research and training activities.

(vii) Publishing and disseminating information for investors’ benefit and objects and achievements of the Fund.

(viii) Advising Central Government on the issues related to Investors’ interest.

(ix) Sponsor specific studies or research or analysis for the development of capital market.

(6) Finance, Accounts and Audit:

(i) Maintenance of accounts of inflow and outflow of funds.

(ii) Reconciliation of accounts of investors

(iii) Preparation of all accounting reports, audit work and annual report

(iv) Returns to Central Government

(v) Preparation of budget of authority and its monitoring

(vi) Accounting for all claims of investor in respective accounts

(vii) Procedure for accounting of investors’ funds and securities

(7) The Chairperson may re-allocate functions, merge or sub-divide divisions as per administrative requirement.

Applicable Rules

Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

[Effective from 7th September, 2016]

Rule 2. Definitions.- (1) In these rules, unless the context otherwise requires,—

(a) “Act” means the Companies Act 2013;

(b) “Authority” means the investor Education and Protection Fund Authority constituted under sub-section (5) of section 125 of the Act;

(c) “Chairperson” means the chairperson of the authority appointed under sub-section (6) of section 125 of the Act;

[2][(d) “Company” means a company defined in sub-section (20) of section 2 of the Act and includes ‘corresponding new bank’ as defined in sub-section (d) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) and clause(b) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), State Bank of India constituted under section 3 of the State Bank of India Act, 1955 (23 of 1955), ‘subsidiary bank’ as defined in clause (k) of section 2 of the State Bank of India (Subsidiary Bank) Act,1959 (38 of 1959) and includes any other entity which is required to transfer any fund to Investor Education and Protection Fund in accordance with any Act or statute governing it[4] [and any transferee company in respect of the assets and liabilities of transferor company]

(da) “Corporate action” means any action taken by the company relating to transfer of shares and all the benefits accruing on such shares [5] [including], bonus shares, split, consolidation, fraction shares etc., except right issue to the Authority;]

  (e) “Existing IEPF” means the Investor Education and Protection Fund OEM constituted under section 205C of the Companies Act, 1956 (1 of 1956);

(f) “Fund” means the Investor Education and Protection Fund (IEPF) constituted under section 125 of the Act;

[6] [(g)omitted]

(h) “Member” means member of the Authority appointed under sub-section (6) of section 125 of the Act; and

(i) “Section” means the section of the Act.

(2) Words and expressions used in these rules and not defined herein but defined in the Act or in the Companies (Specification of Definitions Details) Rules, 2014, shall have the same meanings respectively assigned to them in the Act or in the said rules.

Rule 3. Fund.- (1) The Authority shall administer the Fund.

(2) There shall be credited to the Fund, the following amounts,  namely:-

(a) all amounts payable as mentioned in clause (a) to (n) of sub-section (2) of section 125 of the Act;

(b) all shares in accordance with sub-section (6) of section 124 of the Act;

(c) all the resultant benefits arising out of shares held by the Authority under clause (b):

(d) all grants, fees and charges received by the Authority under these rules;

(e) all sums received by the Authority from such other sources as may be decided upon by the Central      Government;

(f) all income earned by the Authority in any year;

[3][(g) all amounts payable as mentioned in sub-section (3) of section 10B of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, section 10B of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 and section 40A of the State Bank of India (Subsidiary Bank) Act, 1959; and’]

  (h) all other sums of money collected by the Authority as envisaged in the Act.

(3) In case of term deposits and debentures of companies, due unpaid or unclaimed interest shall be transferred to the Fund along with the transfer of the matured amount of such term deposits and debentures.

(4) (a) All the money,  which accrue under sub section (2) [7] [Omitted] of section 125 of the Act shall be deposited in the Consolidated Fund of India under the Major Head `0075- Miscellaneous General Services – 104 – Unclaimed and Unpaid dividends, deposits and debentures etc.’. Such sums along with amount deposited under section 205C of the Companies Act, 1956 shall be transferred to the Fund in the non-interest bearing Public Account after taking due approval of Parliament through Appropriation Act. This non-interest bearing Public Account shall be termed as IEPF Fund and shall be utilised for the purposes provided under sub-section (3) of section 125 of the Act,

(b) (i) All amounts remitted by, the companies shall initially be accounted for under the following heads of Accounts:-

Major Head 0075 – Miscellaneous General Services

Minor Head 104 – Unpaid dividend of Companies.

(ii) Grants and donations given to the Fund by the State Governments[8] [the Central Government], Companies or any other institutions for the purpose of the Fund as also the interest or other income received out of the Investments made from the Fund shall be credited to a separate sub-head under “800 – Other Receipts” below the MH 0075 – Misc. General Services.

(iii)  Amount booked under the above receipt head shall be transferred to the Fund account under Major Head ‘8235 – General and other Reserve Fund – 116 – 1E &PF’ by the PAO, Ministry of Corporate Affairs after making suitable budget provision under Major Head `3451 – Secretariat Economic Services 797 – Transfer to Reserve Fund Deposit Account -Transfer to Investor’s Education and Protection Fund’.  In case the amounts of receipts in a year is more than the budget provision made under Major Head 3451 transfer to the Fund, the difference shall be transferred to the Fund in subsequent year, alter obtaining approval of the Budget Division of Department of Economic Affairs and after making adequate budget provision in the relevant year.

(iv) Budget provision in connection with the activities to be financed from the Fund shall be made under Major Head 3451 – Secretariat Economic Services 090 Secretariat- Investor’s Education and Protection Fund. Actual expenditure under the head shall be recouped from the Fund and the amount so recouped shall be accounted for under the Major Head ‘3451’ as Deduct entry below Minor Head ‘902 – Deduct – amount met from investor’s Education and Protection Fund’ with contra debit to Major Head – ‘8235 -General and Other Reserve Funds -116 – investor’s Education and Protection Fund’.

Rule 4. Accounts and audit.- (1) The Authority shall maintain proper accounts and other relevant records as given in Schedule to these rules and prepare an annual statement of accounts in such form as may he specified by the Central Government in consultation with the Comptroller and Auditor-General of India,

(2) The accounts of the Authority shall be audited annually by the Internal Audit Party of the office of Chief Controller of Accounts and Comptroller and Auditor-General of India at such intervals and any expenditure incurred in connection with such audit shall be payable by the Authority to the Comptroller and Auditor-General of India.

(3) The Comptroller and Auditor-General of India or any other person appointed by him in connection with the audit of the accounts of the Authority shall have the same rights and privileges and authority in connection with such audit as the Comptroller and Auditor-General generally has in connection with the audit of the Government accounts and, in particular, shall have the right to demand the production of books, accounts, connected vouchers and other documents and papers and to inspect any of the offices of the Authority.

(4) The accounts of the Authority as certified by the Comptroller and Auditor-General of India or any other person appointed by him in this behalf together with the audit report thereon shall be forwarded annually to the Central Government and that Government shall cause the same to be laid before each House of Parliament.

Rule 5. Statement to be furnished to the Fund.- [9][(1) Any amount required to be credited by the companies to the Fund as provided under clauses (a) to (n) of sub-section (2) of section 125 of the Act 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 thirty days of such amounts becoming due to be credited to the Fund.]

[10] [Omitted]

[11] [(4A) The companies which have transferred any amount referred to in clauses (a) to (d) of sub-section (2) of section 205C of the Companies Act, 1956 (1 of 1956) to Investor Education and Protection Fund or Central Government, but have not filed the statement or have filed the statement in any format other than in excel template, as required under sub-rule (1) of rule 5, shall submit details mentioned in sub-rule (1) of rule 5 in Form No. IEPF – 1A along with excel template within sixty days of notification of these amended rule.]

(5) The amount may also be remitted by Electronic Fund Transfer in such manner, as may he specified by the Central Government.

(6) (a) On receipt of the statement, the Authority shall enter the details of such receipt in a Register maintained physically or electronically by it in respect of each company every year, and reconcile the amount so remitted and collected, with the concerned designated bank on monthly basis.

(b) Each designated bank shall furnish an abstract of such receipts during the month to the Authority within seven days after the close of every month.

[12] [(c) The company shall maintain the record filed under sub – rule (1) in the same format along with all supporting documents and the Authority shall have the powers to inspect such records.]

(7) The provisions of this rule shall be applicable mutatis mutandis in respect of the amounts to be credited to the Fund in pursuance of clauses (h) to (m) of sub-section (2) of section 125.

[13] [(8) Every company shall within a period of sixty days after the holding of Annual General Meeting or the date on which it should have been held as per the provisions of section 96 of the Act, whichever is earlier and every year thereafter till completion of the seven years period, identify the unclaimed amounts, as referred in subsection (2) of section 125 of the Act, as on the date of closure of financial year the account of which are to be adopted in the Annual General Meeting as per sub-section (1) of section 137 of the Act, separately furnish and upload on its own website and also on website of Authority or any other website as may be specified by the Government, a statement or information of unclaimed and unpaid amounts separately for each of the previous seven financial years through Form No. IEPF-2, containing following information, namely:-

(a) the names and last known addresses of the persons entitled to receive the sum;

(b) the nature of amount;

(c) the amount to which each person is entitled;

(d)the due date for transfer into the Investor Education and Protection Fund; and

(e) such other information as may be considered necessary.]

Rule 6. Manner of transfer of shares under sub-section (6) of section 124 to the Fund:

(1) The shares shall be credited to DEMAT Account of the Authority to be opened by the Authority for the said purpose, within a period of thirty days of such shares becoming due to be transferred to the Fund:

Provided that, in case the beneficial owner has encashed any dividend warrant during the last seven years, such shares shall not be required to be transferred to the Fund even though some dividend warrants may not have been encashed:

 Provided further that in cases where the period of seven years provided under sub-section (5) of section 124 has been completed or being completed during the period from 7th September, 2016 to 31st October, 2017, the due date of transfer of such shares shall be deemed to be 31st October, 2017.

(2) For the purposes of effecting transfer of such shares, the Board shall authorise the Company Secretary or any other person to sign the necessary documents.

(3) The company shall follow the following procedure while transferring the shares, namely:-

(a) 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.

(b) In case, where there is a specific order of Court or Tribunal or statutory Authority restraining any transfer of such shares and payment of dividend or where such shares are pledged or hypothecated under the provisions of the Depositories Act, 1996 or shares already been transferred under sub-rule (1) above, the company shall not transfer such shares to the Fund:

Provided that the company shall furnish details of such shares and unpaid dividend to the Authority in Form No. IEPF 3 within thirty days from the end of financial year.

(c) For the purposes of effecting the transfer, where the shares are dealt with in a depository-

(i) the Company shall inform the depository by way of corporate action, where the shareholders have their accounts for transfer in favour of the Authority.

(ii) on receipt of such intimation, the depository shall effect the transfer of shares in favour of DEMAT account of the Authority.

 “(d) For the purposes of effecting the transfer shares held in physical form-

(i) the Company Secretary or the person authorised by the Board shall make an application, on behalf of the concerned shareholder, to the company, for issue of a new share certificate;

(ii) on receipt of the application under clause (a), a new share certificate for each such shareholder shall be issued and it shall be stated on the face of the certificate that

“Issued in lieu of share certificate No….. for the purpose of transfer to IEPF” and the same be recorded in the register maintained for the purpose;

(iii) particulars of every share certificate shall be in Form No. SH-1 as specified in the Companies (Share Capital and Debentures) Rules, 2014;

(iv) after issue of a new share certificate, the company shall inform the depository by way of corporate action to convert the share certificates into DEMAT form and transfer in favour of the Authority.”

(4) The company shall make such transfers through corporate action and shall preserve copies for its records.

(5) While effecting such transfer, the company shall send a statement to the Authority in Form No. IEPF 4 containing details of such transfer.

(6) The voting rights on shares transferred to the Fund shall remain frozen until the rightful owner claims the shares:

Provided that for the purpose of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the shares which have been transferred to the Authority shall not be excluded while calculating the total voting rights.

(7) The company shall maintain the details of shareholding of each individual shareholders whose shares have been credited to the DEMAT account of the Authority.

(8) All benefits accruing on such shares e.g., bonus shares, split, consolidation, fraction shares etc., except right issue shall also be credited to such DEMAT account.

(9) The shares held in such DEMAT account shall not be transferred or dealt with in any manner whatsoever except for the purposes of transferring the shares back to the claimant as and when he approaches the Authority or in accordance with sub-rule (10) and (11).

(10) If the company is getting delisted, the Authority shall surrender shares on behalf of the shareholders in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 and the proceeds realised shall be credited to the Fund and a separate ledger account shall be maintained for such proceeds.

(11) In case the company whose shares or securities are held by the Authority is being wound up, the Authority may surrender the securities to receive the amount entitled on behalf of the security holder and credit the amount to the Fund and a separate ledger account shall be maintained for such proceeds.

(12) Any further dividend received on such shares shall be credited to the Fund and a separate ledger account shall be maintained for such proceeds”.

(13) Any amount required to be credited by the companies to the Fund as provided under sub-rules (10), (11) and sub-rule (12) shall be remitted into the specified account of the IEPF Authority maintained in the Punjab National Bank.

(14) Authority shall furnish its report to the Central Government as and when noncompliance of the rules by companies came to its knowledge.

Rule 7. Refund to claimants from Fund:

(1) Any person whose shares, unclaimed dividend, matured deposits, matured debentures, application money due for refund, or interest thereon, sale proceeds of fractional shares, redemption proceeds of preference shares etc., has been transferred to the Fund, may claim the shares under proviso to sub-section (6) of section 124 or apply for refund under clause (a) of sub-section (3) of section 125 or under proviso to sub-section (3) of section 125, as the case may be, to the Authority by submitting an online application in Form IEPF-5 available on the website www.iepf.gov.in along with fee specified by the Authority from time to time in consultation with the Central Government.

(2) The claimant shall after making an application in Form IEPF-5 under rule (1), send the same duly signed by him along with, requisite documents as enumerated in Form IEPF-5 to the concerned company at its registered office for verification of his claim.

“ (2A) Every company which has deposited the amount to the Fund shall nominate a Nodal Officer for the purpose of coordination with IEPF Authority and communicate the contact details of the Nodal Officer duly indicating his or her designation, postal address, telephone and mobile number and company authorized e-mail ID to the IEPF Authority, within fifteen days from the date of publication of these rules and the company shall display the name of Nodal Officer and his e-mail ID on its website. ”

(3) The company shall, within fifteen days from the date of receipt of claim, send a verification report to the Authority in the format specified by the Authority along with all the documents submitted by the claimant.

[ “Provided that in case of non receipt of documents by the Authority after the expiry of ninety days from the date of filing of Form IEPF-5, the Authority may reject Form IEPF-5, after giving an opportunity to the claimant to furnish response within a period of thirty days.”];

(4) After verification of the entitlement of the claimant-

(a) to the amount claimed, the Authority and then Drawing and Disbursement Officer of the Authority shall present a bill to the Pay and Accounts Office for e- payment as per the guidelines,

(b) to the shares claimed, the Authority shall issue a refund sanction order with the approval of the Competent Authority and shall credit the shares to the DEMAT account of the claimant to the extent of the claimant’s entitlement.

(5) The Authority shall, in its records, cause a note to be made of all the payments made under sub-rule (4).

(6) An application received for refund of any claim under this rule duly verified by the concerned company shall be disposed off by the Authority within sixty days from the date of receipt of the verification report from the company, complete in all respects and any delay beyond sixty days shall be recorded in writing specifying the reasons for the delay and the same shall be communicated to the claimant in writing or by electronic means.

(7) In cases, where the application is incomplete or not approved, a communication shall be sent to the claimant and the concerned company by the Authority detailing deficiencies of the application.

[ “Provided that in case of non receipt of rectified documents by the Authority after the expiry of ninety days from the date of such communication, the Authority may reject Form IEPF-5, after giving an opportunity to the claimant to furnish response within a period of thirty days.”]

(8) In case, claimant is a legal heir or successor or administrator or nominee of the registered share holder, he has to ensure that the transmission process is completed by the company before filing any claim with the Authority.

(9) In case, claimant is a legal heir or successor or administrator or nominee of any other registered security or in cases where request of transfer or transmission of shares is received after the transfer of shares by company to the Authority, the company shall verify all requisite documents required for registering transfer or transmission and shall issue letter to the claimant indicating his entitlement to the said security and furnish a copy of the same to the Authority while verifying the claim of such claimant.

(10) The claimant shall file only one consolidated claim in respect of a company in a financial year.

(11) The company shall be liable under all circumstances whatsoever to indemnify the Authority in case of any dispute or lawsuit that may be initiated due to any incongruity or inconsistency or disparity in the verification report or otherwise and the Authority shall not be liable to indemnify the security holder or Company for any liability arising out of any discrepancy in verification report submitted etc., leading to any litigation or complaint arising thereof.”.]

Rule 8. Power to direct payment of amount due to the Fund:

(1) The company shall furnish a statement to the Authority in Form No. IEPF 6 within thirty days of end of financial year stating therein the amounts due to be transferred to the Fund in next financial year.

(2) The company shall also furnish a statement to the authority within thirty days of the closure of its accounts for the financial year stating therein the reasons of deviation, if any, of amounts detailed in sub-rule (1) above and actual amounts transferred to the Fund.

(3) Authority shall furnish a report to the Central Government within sixty days of end of financial year giving details of companies who have failed to transfer the due amount to the Fund.

(4) Authority shall also furnish a report to the Central Government by end of next financial year giving details of companies who have failed to file information referred to in sub-rule (8) of rule 5.

 

 

Rule 9. Transfer of assets, liabilities, etc., of the existing IEPF to the Authority.- On and from the date of establishment of the Authority,-

(a) any reference to the existing IEPF in any law other than these rules or in any contract or other instrument shall be deemed as a reference to the Authority;

(b) all properties and assets, movable and immovable, of, or belonging to the existing IEPF, shall vest in the Authority;

(c) all rights and liabilities of the existing IEPF shall be transferred to, and be the rights and liabilities of the Authority;

(d) without prejudice to the provisions of clause (c), all debts, obligations and liabilities incurred, all contracts entered into and all matters and things engaged to be done by, with or for the existing IEPF immediately before that date, for or in connection with the purpose of the said existing IEPF shall be deemed to have been incurred, entered into, or engaged to be done by, with or for, the Authority;

(e) all sums of money due to the existing IEPF immediately before that date shall be deemed to be due to the Authority; and

(f) all suits and other legal proceedings instituted or which could have been instituted by or against the existing IEPF, immediately before that date may be continued or may be instituted by or against the Authority.

Rule 10. Returns and reports.- (1) The Authority shall furnish to the Central Government at such time and in such form and manner as may be specified or as the Central Government may direct, such returns and statements and such particulars with regard to its activity.

(2) Without prejudice to the provisions of sub-rule (1), the Authority shall, within one hundred and eighty days after the end of each financial year, submit to the Central Government a report in such form, as may be specified, giving a true and full account of its activities during the previous financial year.

Rule 11. Protection of action taken in good faith.- No suit, prosecution or other legal proceedings shall lie against the Central Government or Authority or any officer of the Central Government or any member, officer or other employee of the Authority for anything which is in good faith done or intended to be done under these rules.

Rule 12.Repeal and savings. – (1) The Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001 and Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012 are hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the rules repealed by sub-rule (1) shall, in so far as it is not inconsistent with the provisions of these rules, be deemed to have been done or taken under the corresponding provisions of these rules.

Schedule

REGISTERS AND BOOKS OF ACCOUNT TO BE MAINTAINED BY THE AUTHORITY

(i) Register of Shares transferred under sub-section (6) of section 124

(ii) Central Cash Book

(iii) Company wise Ledger

(Iv) General Ledger

(v) Cashier’s Cash Book

(vi) Bank Ledger

(vii) Register of Assets

(viii) Investment Register

(ix) Claim Register

(x) Refund Register

(xi) Suspense Register

(xii) Documents Register

(xiii) Any other register or Book as decided by Authority

Applicable Rules

Investor Education and Protection Fund Authority (Recruitment, Salary and other Terms and Conditions of Service of officers and other employees) Rules, 2016.

[Approved by the Competent Authority yet to be legislatively vetted]

Rule 2 Definitions. – (1) In these rules, unless the context otherwise requires,-

(a) “Act” means the Companies Act, 2013 (18 of 2013);

(b) “IEPF Authority” means the Authority as defined under section 125 of the Act;

(c) “Schedule” means the Schedule annexed to these rules.

(2) All the words and expressions used and not defined in these rules, but defined in the Act shall have the meanings as assigned to them in the Act.

Rule 3 Application. – These rules shall apply to all the officers and employees of the Authority.

Rule 4 Number of posts, classification and pay band with pay grade. – The number of posts, their classification and the pay band with grade pay attached thereto shall be as specified in columns (2) to (4) of the Schedule.

Rule 5 Method of recruitment, eligibility etc. – The method or recruitment, eligibility and other matters relating thereto shall be as specified in columns (5) to (13) of the Schedule.

Rule 6 Procedure for appointment on deputation. – The following procedure shall be followed for making appointment on deputation to posts wherever prescribed in the Schedule:

(1) The IEPF Authority shall invite applications for these posts.

(2) The selection committee for evaluating the applications received under Sub-Rule 1 above shall be constituted as per column 12 of the schedule.

Rule 7 Period of deputation. – The period of deputation, including the period of deputation in another ex-cadre post held immediately preceding this appointment in the same or some other organization or department of the Central Government, shall be three years from the date of beginning of the deputation for the posts carrying grade pay below Rs. 6600 and shall be five years for the posts carrying grade pay of Rs. 8700 or above. The period of deputation may be extended as per extant instruction of the Department of Personnel &Training issued in this regard.

(2) The applicant for deputation should not have attained the age of fifty six years on the last date of receipt of applications. The instructions issued by Department of Personnel and Training shall be applicable to officers and staff serving on deputation basis to the IEPF Authority

Rule 8 Conditions of service. – The conditions of service of the officers and employees of the Authority including in matters of pay, allowances and leave shall be regulated in accordance with such rules and regulations as are as the extant time applicable to the officers and employees of the corresponding scale of pay of the Central Government.

Rule 9 Accommodation. – The officers and employees of the IEPF Authority shall have the option of claiming House Rent Allowance in accordance with the rate prescribed by the Central Government as applicable to officers and employees of the corresponding scales of pay of the Central Government:

Provided that they shall not be eligible for House Rent Allowance in case they are declared eligible for general pool residential accommodation and occupy such a Government accommodation allotted to them.

Rule 10 Disciplinary Proceedings. —The modalities of disciplinary proceedings against the officers and employees of the Authority shall be notified by the CEO IEPF Authority as per rules and regulations applicable to officers and employees of the corresponding scales of pay of the Central Government.

Rule 11 Disqualification. – No person-

(i) who has entered or contracted a marriage with a person having a spouse living, or

(ii) who, having a spouse living has entered into or contracted a marriage with any person,

Shall be eligible for appointment to the said posts:

Provided that the Central Government may, if satisfied that such marriage is permissible under the personal law applicable to such person and the other party to the marriage and that there are other grounds for so doing, exempt any person from the operation of this rule.

Rule 12Power to relax. – Where the Central Government is of the opinion that it is necessary or expedient to do so, it may, by order and for reasons to be recorded in writing, relax any of the provisions of these rules with respect to any class or category of persons.

 

Name of the Post	1	(1)General Manager, IEPF Authority	(2) Assistant General Manager, IEPF Authority
Number of Post	2	*I *Subject to variation depending on work load	*I *Subject to variation depending on work load
Classification	3	Not applicable	Not applicable
Pay Rand with Grade Pay or pay seal°	4	Pay Band-4 (Rs. 37400-67000/-)+ Grade Pay Rs. 8700/-(Pre-revised) (Annual increment @3%)	Pay Band-3 (Rs. 15600-39100/-)+ Grade Pay Rs. 5400/-(Pre-revised)
Whether selection post or I non-selection post	5	Not applicable	Not Applicable
Age limit for direct recruits	6	Not Applicable	Not Applicable
Educational and other qualifications required for direct recruits	7	Not Applicable	Not applicable
Whether age and other educational qualifications prescribed for direct recruits will apply in the case of promotees	8	Not Applicable	Not applicable
Period of probation, if any	9	Not Applicable	Not applicable
Method of recruitment, whether by direct recruitment or, by promotion or by deputation or absorptions and percentage of posts to be filled by various methods	10	Deputation	Deputation
In case of recruitment by promotion or deputation absorption, grades from which promotion/ deputation/ absorption is to be made	11	By Deputation   Officers of the Central or State Government (i)      holding analogous post on regular basis. –or- (ii)    With 6 years regular service in PB-3 + Grade Pay of Rs. 7600/-(Pre-revised) –or– (iii)   with 10 years regular service in PB-3 + Grade Pay of Rs. 6600/-(Pre-revised) Desirable: Having experience in administration/ Establishment	By Deputation   Officers of the Central or State Government (i)   holding analogous post on regular basis. –or- (ii) With 2 years regular service in PB-2 + Grade Pay of Rs. 4800/-(Pre-revised) –or– Desirable: Having experience in administration/ Establishment
if Departmental Promotion Committee exists, what is its composition	12	The Selection Committee for deputation consists of:   (i)         Additional Secretary, MCA — Chairman (ii)        Joint Secretary, MCA –Member (iii)      Joint Secretary, , MCA — Member	The Selection Committee for deputation consists of:   (i)Additional Secretary, MCA — Chairman (ii)           Joint Secretary, MCA –Member (iii)         Joint Secretary, , MCA — Member
Circumstances in which UPSC is to be consulted making recruitment	13	Not Applicable	Not Applicable

Applicable Circulars

Relaxation of additional fees for filing Form IEPF-1Applicable Circulars

General  Circular  No 10/2016, dated 7th September, 2016

The  Ministry  had deployed the  V2R2  version  of  MCA21 on 28th March,  2016.Consequently, the Form 1- INV as prescribed under the Companies Act, 1956 was not available for filing  on the  MCA21  portal since 25th March, 2016.  In view  of this  and deployment  of the  new Form  IEPF-1 (which  replaces earlier  Form  1-INV) after   the notification of Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 [IEPF (AATR) Rules] with effect from 7th September, 2016, it is clarified that companies that have not filed the requisite information in Form 1 INV can now file the information in Form IEPF-1. Further, as a onetime measure, for companies with due date for filing of the form 1- INV falling between the period 25th March 2016 to 6th September, 2016, the companies may file the form IEPF- 1 without additional fees on or before 06.10.2016.

Clarification Regarding Filing of Offline Challans with IEPF Authority under Companies Act.

General Circular No. 13/2016, dated 5th December, 2016

In accordance with Investor Education & Protection Fund (Accounting, Audit, Transfer, and Refund) Rules, 2016, notified on 05.09.2016, it is mandatory for the companies depositing amounts to IEPF under section 125 of Companies Act 2013 to:-

(i) generate challan online only;

(ii) file form IEPF-1 mentioning the SRN No of challan (online mode only).

2. All companies transferring the amount to IEPF are, therefore, requested to ensure that the above procedure is followed. The challans not generated on MCA 21 portal will not be accepted after 15.12.2016.

 Clarification regarding due date of transfer of shares to IEPF Authority

General Circular No. 15/2016, dated 7th December, 2016

                     Various representation have been received from the Companies for simplification of transfer process of shares under Investor Education & Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, notified on 05.09.2016. It has also been requested  for extending the due date prescribed for transferring the shares to IEPF Authority. The matters, including simplification of transfer process and extension of date for such transfer, are under consideration and the rules are likely to be revised. The revised rules shall be notified in due course.

Clarification regarding online generation of Challans for Offline payment cases.

General Circular No. 02/2017 dated 20^th April, 2017

 

In terms of Investors Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 as notified on 05.09.2016, and as per the prerequisites of e-form IEPF-1, the companies are required to transfer the amounts to Investor Education and Protection Fund (IEPF) through Challans generated on MCA 21 portal. Attention is also drawn to circular No. 13/2016 dated 05.12.2016 issued by this office, communicating that Challans which are not generated on MCA 21 portal will not be accepted after 15.12.2016.

2. However it has been noticed that there are companies, which have transferred the amount to IEPF prior to 15.12.2016, through Challans not generated on MCA-21 portal and these companies were/ are unable to file IEPF-1.
3. To facilitate filing of e-form IEPF-1 by such companies, following two step processes is suggested:-

Step-I

Company concerned is required to submit details of the challans in prescribed format (enclosed) to IEPF Authority on email id challan.iepfa@mca.gov.in. The copy of challans and certificate for authentication of the details submitted are required to be obtained from practicing professionals’ viz. Chartered Accountants, Company Secretaries and Cost Accountants. This information will be accepted by IEPF Authority up to 20^th May, 2017 only and no further relaxation shall be granted.

Step-II

The submitted data shall be processed by the IEPF Authority and a Front Office service will be made available on IEPF website-www.iepf.gov.in from 5th June, 2017 for a period of 30 days i.e. up to 5th July, 2017 to enable the companies to submit the required data online. An automated generated number will be provided by the MCA21 system on validation of entries and using this automated generated number as SRN, companies may file e-form IEPF-1 online & upload investor details without requirement of filing additional fees.

Annexure

S.No.	CIN/BCIN	Amount Paid	Date of Payment	Financial Ye	Mode of Payment(Always be offline)	Particulars of the payment

Transfer of Shares to IEPF Authority

General Circular No. 03/2017 dated 27^th April, 2017

Pursuant to second proviso to Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 notified on February 28, 2017, where the seven year period provided under sub-section (5) of section 124 is completed during September 7, 2016 to May 31, 2017, the due date for transfer of such shares by companies is May 31, 2017.

2. The IEPF Authority has decided to open a special demat account with National Securities Depository Limited (NSDL) through a Depository Participant of NSDL.

3. The special demat account will have features and functionality to support IEPF operations using paperless, digital processes and facilitate record keeping of shares transferred to the IEPF Authority to meet the requirements of the Rules. The details of the DEMAT account will be issued in due course.

4. All companies required to transfer shares to IEPF Authority under the aforesaid Rules shall transfer such shares, whether held in dematerialised form or physical form,to the demat account of IEPF Authority by way of corporate action. Information related to the shareholders whose shares are being transferred to IEPF’s demat account shall be provided to NSDL in prescribed format.

5. NSDL will prescribe the file formats and operational procedures for transfer of shares to special demat account of the IEPF Authority by April 30^th 2017 and May 15^th 2017 respectively.

6. The charges to be levied by NSDL to the companies towards upload and maintenance of records pertaining to shares transferred to the special demat account of the IEPF Authority are as under:

i. Transaction Fees at the time of effecting transfer of shares to Demat Account of IEPF Authority: Rs. 10/- per record subject to minimum of Rs. 500/,

ii. Annual Maintenance Fees: Rs. 11/- per record subject to minimum based on paid-up capital of the company as mentioned below:

Nominal      Value     of            Admitted Securities (Rs.)	Annual Custody Fee payable by Company (Rs.)
UptoRs.5 crore	2300
Above Rs.5 crore and upto Rs.10 crore	6350
Above Rs.10 crore and upto Rs.20 crore	13,500
Above Rs.20 crore	22,500

These charges are in addition to the fees that Depositories levy on the companies for corporate actions.

Transfer of Shares to IEPF Authority

General Circular No.05/2017 dated 16^th May, 2017

Please refer to General Circular No. 03/2017 dated 27.04.2017 regarding “Transfer of shares to IEPF Authority” issued by this office.

2. The subject matter of the said circular is being reviewed by the Ministry and hence the said circular stands withdrawn with immediate effect. Fresh instructions on the matter will be issued in due course of time.

Clarification regarding due date of transfer of shares to IEPF Authority

General Circular No. 06/2017 dated 29^th May 2017

Pursuant to second proviso to Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 notified on February 28, 2017, where the seven year period provided under sub-section (5) of section 124 is completed during September 7, 2016 to May 31, 2017, the due date for transfer of such shares by companies is May 31, 2017.

2. The modalities for transfer/ transmittal of shares from companies accounts to the demat account of the IEPF Authority are being finalized with the depositories. IEPF Authority is considering to open special Demat account and till opening of demat accounts, the due date for transfer of shares stands extended. In view of this, a revised due date for transfer/ transmittal of shares shall be notified soon.

3. Companies, are advised to complete all formalities, as laid down in the aforesaid Rules without waiting for the fresh dates. Companies which have already published notice in newspaper and send notices to the shareholders, need not give the fresh notices again due to this extension.

Transfer of Shares to IEPF Authority

General Circular No.12/2017 dated 16^th October, 2017

Pursuant to second proviso to Rule 6 of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended time to time, wherein the seven years period provided under sub-section (5) of section 124 is completed for unpaid/unclaimed dividends during September 7, 2016 to October 31, 2017, the due date for transfer of such shares by companies is October 31st, 2017. 

2. The IEPF Authority has opened demat accounts with National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) through Punjab National Bank and SBICAP Securities Limited respectively, as Depository Participants. The details of said accounts are as under:

Particulars	PNB	SBI CAP
DP ID	IN300708	12047200
Client ID	10656671	13676780

3. These demat accounts will have features and functionality to support IEPF operations using paperless, digital processes and facilitate record keeping of shares transferred to the IEPF Authority to meet the requirements of the Rules.

4. All companies which are required to transfer shares to IEPF Authority under the aforesaid Rules, shall transfer such shares, whether held in dematerialised form or physical form, to the demat accounts of IEPF Authority by way of corporate action. The information related to the shareholders, whose shares are being transferred to IEPF’s demat accounts with PNB or SBICAP shall be provided by the Companies to NSDL or CDSL respectively as per the prescribed format by the concerned depository.

5. The Ministry of Corporate Affairs has held separate discussions with NSDL and CDSL during which they have agreed to levy reduced charges for account maintenance and record keeping pertaining to shares transferred to the demat accounts of IEPF Authority. A memorandum of Understanding (MOU) to the effect is being finalized with the two depositories and the same will also be uploaded on website www.iepf.gov.in on finalization. NSDL and CDSL shall, based on these discussions, separately notify the charges, which shall not be more than those finalized in the MOU. NSDL and CDSL are required to allow the services with immediate effect.

6. Any cash benefit accruing on account of shares transferred to IEPF such as dividend, proceeds realized on account of delisting of equity shares of the company, amount entitled on behalf of security holder if the company is being wound up as per Rule 6, sub-rule (10), (11) and (12) of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, shall be transferred by companies to bank account opened by the Authority with Punjab National Bank, sansad marg, New Delhi, which has been linked to demat accounts mentioned at para 2 above.

7. It is clarified that Only amounts mentioned in para 6 above are to be transferred to Bank account indicated above. 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.

Relaxation of additional fees and extension of last date of filing of form IEPFA-1A 

and form IEPF-2

 General Circular No. 11/2019 dated 25-10-2019

Keeping in view the requests received from various stakeholders seeking extension of time on account of various factors for filing form IEPF-1A and form IEPF-2, it has been decided to relax the additional fee payable by companies on filing form IEPF-1A upto 31.12.2019 and form IEPF-2(for the purpose of filing Statement of unclaimed and unpaid amounts) upto 30.11.2019. After expiry of due date, the additional fee shall be payable.

Filings under section 124 and section 125 of the Companies Act 2013 raw IEPFA (Accounting,
Audit, Transfer and Refund) Rules 2016 in view of emerging situation due to outbreak of COVID-19

General Circular No. 16/2020 dated 13th April, 2020

In view of the situation emerging out of the outbreak of COVID-19, which requires adherence of social distancing norms, the stakeholders have pointed about various difficulties and sought relaxation especially in procedures related to transfer of money remaining unpaid or unclaimed for a period of seven years in terms of the provision of section 124(5) of the Companies Act, 2013 (the Act) and transfer of shares under Section 124(6) of the Act read with the IEPFA (Accounting, Audit, Transfer and Refund) Rules.

2.In this regard, it may be noted that the Ministry of Corporate Affairs has already allowed filing in MCA-21 registry without additional fees till 30th September, 2020 through General Circular No. 11/2020, dated 24th March, 2020 and General Circular No. 12/2020, dated 30th March, 2020. Therefore, the necessary relaxation, insofar as filing of various other IEFF e-forms (IEPF-1, IEFF-1A, IEPF-2, IEPF-3, IEPF-4, IEPF -7) and e-verification of claims filed in e-form IEPF-5, is concerned, the same has already been provided. Therefore, the stakeholders may plan other concomitant actions accordingly.

Filings under section 124 and section 125 of the Companies Act 2013 r/w IEPFA
(Accounting, Audit, Transfer and Refund) Rules 2016 in view of extension of CFSS, 2020

General Circular No.35/2020, dated 29th September, 2020

The Ministry of Corporate Affairs through General Circular No. 30/2020 dated 28^th September 2020 has extended Companies Fresh Start Scheme, 2020 till 31^st December 2020. Necessary relaxation, insofar as filing of various IEPF e-forms (IEPF-1, IEPF-1A, IEPF-2, IEPF-3, IEPF-4, IEPF-7) and e-verification of claims filed in e-form IEPF-5 without additional fees till 31^st December 2020 has also been provided in the said circular. The stakeholders may plan other concomitant actions accordingly.

 

Applicable Notifications

Tenure of Appointment Additional Charge- IEPF Authority

Notification No. S.O. 554(E) dated 20th February, 2017

S.O. 554(E).—In exercise of the powers conferred by sub-section (5) and (6) of section 125 of the Companies Act, 2013 (18 of 2013) read with rule 6 of the Investor Education and Protection Fund Authority (Appointment of Chairperson and Members, holding meetings and provision for offices and officers) Rules, 2016, the Central Government hereby extends the period of tenure of Shri Amardeep Singh Bhatia, as Chief Executive Officer (Additional Charge) in the Investor Education and Protection Fund Authority for a further period of one year with effect from the 1st November, 2016 or till further orders, whichever is earlier.

 

[1] Inserted by Investor Education and Protection Fund Authority (Appointment of Chairperson and Members, holding of meetings and Provision for offices and officers) Amendment Rules, 2016 vide notification no. F.No. 05/27/2013-IEPF dated 5th September, 2016.

[2]Substituted by the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017videNotification No. G.S.R. 178(E)dated 28th February 2017. Prior to substitution it read as under-

“Company” means company as defined in sub-section (20) of section 2 of the Act and includes “corresponding new bank” as defined in sub-section (d) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) and clause (b) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980);

[3]  Substituted by the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 vide Notification No. G.S.R. 178(E) dated 28th February 2017. Prior to substitution it read as under-

“g) all amounts payable as mentioned in sub-section (3) of section 108 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and section 10B of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980; and”

[4]  Inserted by the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019.

[5] Substituted for the words ‘namely’ by Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019.

[6] Omitted by Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019. Prior to omission it read as under:

““Investor” means any person, who has committed money in shares, or debentures, bond or deposits under a scheme or plan of a company registered under the Act”

[7] Omitted by Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019. Prior to omission it read as under:

“[except clause (g)]”

[8] Inserted by the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019.

[9] Substituted by the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019. Prior to substitution it read as under-

“(1) Any amount required to be credited by the companies to the Fund as provided under clause (a) to (n)of sub-section (2) of section 125 of the Act shall be remitted into the specified branches of Punjab National Bank, which is the accredited Bank of the Pay and Accounts Office, Ministry of Corporate Affairs and other authorised banks engaged by the MCA-2 1 system, within a period of thirty days of such amounts becoming due to be credited to the Fund.”

[10]  Omitted by Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019. Prior to omission it read as under:

(2) The amount shall be tendered by the companies along with challan (in triplicate) to the specified Bank Branches of Punjab National Bank and other authorised banks under MCA-21 system who will return two copies of the challan, duly stamped in token of having received the amount, to the Company. The third copy of the challan will be forwarded along with the daily credit scroll by the receiving branch to its Focal Point Branch of the Bank for onward transmission to the Pay and Accounts Office, Ministry of Corporate Affairs.

(3) Every company shall file with the concerned Authority one copy of the challan referred to in sub-rule (2) indicating the deposit of the amount to the Fund and shall fill in the full particulars of the amount tendered,  including the head of account to which it has been credited.

(4) The company shall, along with the copy of the challan as required under sub-rule (3), furnish a Statement in Form No. IEPF 1 containing details of such transfer to the Authority within thirty days of submission of challan.

[11] Inserted by the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019.

[12] Substituted by the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019. Prior to substitution it read as under-

“(c) The company shall maintain record consisting of name, last known address, amount, folio number or client ID, certificate number, beneficiary details etc. of the persons in respect of whom unpaid or unclaimed amount has remained unpaid or unclaimed for a period of seven years and has been transferred to the Fund and the Authority shall have the powers to inspect such records.”

[13] Substituted by the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 vide Notification No. G.S.R. 571(E) dated 14th August, 2019. Prior to substitution it read as under-

“(8) Every company shall within a period of ninety days after the holding of Annual General Meeting or the date on which it should have been held as per the provisions of section 96 of the Act and every year thereafter till completion of the seven years period, identify the unclaimed amounts, as referred in sub-section 2 of section 125 of the Act, as on the date of holding of Annual General Meeting or the date on which it should have been held as per the provisions of section 96 of the Act, separately furnish and upload on its own website and also on website of Authority or any other website as may be specified by the Government, a statement or information through Form No. IEPF 2, separately for each year, containing following information, namely:-

(a) the names and last known addresses of the persons entitled to receive the sum;

(b) the nature of amount;

(c) the amount to which each person is entitled ;

(d) the due date for transfer into the Investor Education and Protection Fund; and

(e) such other information  as may be considered relevant for the purposes.”