Corporate Laws & Corporate Governance Committee
The Institute of Chartered Accountants of India

14th June, 2021

ANNOUNCEMENT

Sub: Amendment in Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016

This is to inform you that the Ministry of Corporate Affairs vide its notification dated 09th
June 2021 has amended the provisions of Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 to introduce the manner of transfer of
shares under section 90(9) of the Companies Act 2013 to the Investor Education and
Protection Fund.

Accordingly, the following amendments have been made in the aforesaid rules. Analysis of
which is given below:

S Rule Pre-Amendment Post-Amendment

No.

1 Rule 3(2) of There shall be credited to There shall be credited to the Fund,

Investor the Fund, the following the following amounts, namely:-

Education and amounts, namely:-

Protection (a) all amounts payable as

Fund Authority (a) all amounts payable mentioned in clause (a) to (n) of

(Accounting, as mentioned in clause sub-section (2) of section 125 of the

Audit, Transfer (a) to (n) of sub-section Act;

and Refund) (2) of section 125 of the

Rules, 2016: Act; (b) all shares in accordance with

sub-section (6) of section 124 of the

Fund (b) all shares in Act;

accordance with sub-

section (6) of section 124 (c) all the resultant benefits arising

of the Act; out of shares held by the Authority

under clause (b);

(c) all the resultant

benefits arising out of (d) all grants, fees and charges

shares held by the received by the Authority under

Authority under clause these rules;
(b); (e) all sums received by the
Authority from such other sources as
(d) all grants, fees and may be decided upon by the Central
charges received by the Government;
Authority under these
rules; (f) all income earned by the
Authority in any year;
(e) all sums received by
the Authority from such (fa) all shares held by the Authority
other sources as may be in accordance with proviso of sub-
decided upon by the section (9) of
Central Government; section 90 of the Act and all the
resultant benefits arising out of such
(f) all income earned by shares, without any restrictions
the Authority in any year;

(g) all amounts payable (g) all amounts payable as
mentioned in sub-section (3) of
as mentioned in sub- section 10B of the Banking
Companies (Acquisition and Transfer
section (3) of section 10B of Undertakings) Act, 1970, section
10B of the Banking Companies
of the Banking (Acquisition and Transfer of
Undertakings) Act, 1980, sub-section
Companies (Acquisition (3) of section 38A of the State Bank
of India Act, 1955],and section 40A
and Transfer of of the State Bank of India
(Subsidiary Bank) Act, 1959; and’
Undertakings) Act, 1970,
(h) all other sums of money
section 10B of the collected by the Authority as
envisaged in the Act.
Banking Companies

(Acquisition and Transfer

of Undertakings) Act,

1980, sub-section (3) of

section 38A of the State

Bank of India Act,

1955],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.

2 Rule 6A of N.A. New Insertion

Investor

Education and (1) The shares shall be credited to

Protection DEMAT Account of the Authority to

Fund Authority be opened by the Authority for the

(Accounting, said purpose, within a period of
Audit, Transfer thirty days of such shares becoming
and Refund) due to be transferred to the Fund.
Rules, 2016:

Manner of Provided that transfer of shares by
the companies to the Fund shall be
transfer of deemed to be transmission of shares
and the procedure to be followed for
shares under transmission of shares shall be
followed by the companies while
sub-section (9) transferring the shares to the fund.

of section 90

of the Act to

the Fund

Provided further that such shares
shall be transferred to the Authority
without any restrictions and no
application shall be filed for claiming
back such shares from the Authority.

(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) 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;

(B) for the purposes of effecting the
transfer of 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 under subsection (9) of section
90 of the Act” 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
within thirty days of the corporate
action taken under sub-rule (4) of
rule 6A containing details of such
transfer and the company shall also
attach a copy of order of the
Tribunal under sub-section (8) of
section 90 of the Act along with a
declaration that no application under
sub-section (9) of section 90 of the
Act has been made or is pending
before the Tribunal.

(6) The voting rights on shares
transferred to the Fund shall remain
frozen.

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 all
such statements filed under sub –
rule (3) in the same format along
with all supporting documents and
the Authority shall have the powers
to inspect such records.

(8) All benefits accruing on such
shares like bonus shares, split,
consolidation, fraction shares and
the like except right issue shall also
be credited to such DEMAT account
[by the company which shall send a
statement to the Authority in Form
No. IEPF-4 within thirty days of the
corporate action containing details of
such transfer.]

(9) 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.

(10) In case the company whose
3 eforms IEPF-4 - shares or securities are held by the
and IEPF-7 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.

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

(12) Any amount required to be
credited by the companies to the
Fund as provided under sub-rules
(9), (10) and sub-rule (11) shall be
remitted into the specified account
of the IEPF Authority maintained in
the Punjab National Bank [and the
details thereof shall be furnished to
the Authority in Form No. IEPF-7
within thirty days from the date of
remittance].

Provided further that all such
amounts shall be transferred to the
Authority without any restrictions
and no application shall be filed for
claiming back such amounts from
the Authority.

(13) Authority shall furnish its report
to the Central Government as and
when noncompliance of the rules by
companies came to its knowledge.”
Substitution of eforms IEPF-4 and
IEPF-7 with the updated versions of
the same as to enable the
requirement of filing the said eforms
pursuant to the requirements
introduced through Rule 6A of IEPFA
(Accounting, Audit, Transfer and
Refund) Rules, 2016.

Notification is available at the link-
https://www.mca.gov.in/bin/dms/getdocument?mds=XvERwVtVFjMBkvvi%252BqMcOg%25
3D%253D&type=open

Members may take note of the above and plan accordingly.

Sincerely Yours,

Chairman and Vice Chairman
Corporate Laws & Corporate Governance Committee
The Institute of Chartered Accountants of India