1. BNP & Associates Company Secretaries www.bnp-associates.com
IEPF
BNP & Associates
Company Secretaries

2. Highlights of IEPF rules as amended
IEPF Authority constituted on 05th May 2016
IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, as amended on 28th Feb 2017 ##
* with effect from 28th Feb 2017 ##
* Investor can claim refund of funds transferred under Section 205C of Companies Act 1956
* Per MCA circular no.10/2016 dated 07 Sept. 2016:
IEPF-1 instead of Form INV-1 - no additional fees till 31st May ###
Filing period 7th September st may ####

3. Highlights of IEPF rules as amended
* Rule 5: Transfer of Funds - as per section 125(2) of the Companies Act, 2013
- Form IEPF -1 - details of funds transfer, within 30 days of transfer
- Form IEPF -2 - details of unclaimed amount as on AGM date
file within 90 days of AGM, separately for each year until 7 years completed]
Upload on own website, IEPF website or other website to be specified by Govt.

4. Highlights of IEPF rules as amended
* Rule 6: Transfer of shares - as per section 124(6) of Companies Act, 2013 REVISED
- Form IEPF -3 - details of unpaid dividend and shares on which restraint ordered by Court/Tribunal/Statutory authority
File every year, within 30 days of end of FY
- Form IEPF -4 details of shares transferred to authority
File ‘while effecting transfer’. Within ?? days.

5. Compliance

6. Immediate Compliance - Rule 5 (1),(4),6(c)
* For Unpaid and unclaimed amount u/s.125(2)(a) to (n) for 7 years (since ), pay to IEPF
as per Rule 5 - Even if 7 years are not consecutive Transfer required
* After payment, file form IEPF-1 within 30 days
* Company shall maintain records of persons in respect of whom amount transferred to IEPF

7. Immediate Compliance - Rule 5(8)
every company shall identify unclaimed amount of the nature u/s.125(2), as on date of AGM!
And separately for each year, till completion of 7 years, upload IEPF-2 within 90 days of AGM, on its website as well as of IEPF or other website specified by MCA

8. Immediate Compliance proviso to Rule 6(3)(a) Revised
Transfer of Shares
In respect of unpaid and unclaimed dividend as on 28th Feb 2017 during the last seven years
Less Court or Tribunal or Statutory Authority restraining transfer of Shares and payment of Dividend
Dispute cases, transmission cases, tax enquiry cases etc not covered
Simultaneously publish on website + advertisement in English and regional language having wide circulation

9. Immediate Compliance
Board shall authorise CS or other person to sign necessary documents Rule 6 (2)
-No relevance to clause 5A of old Listing agreement???
Furnish to IEPF in – DETAILS OF SHARES TRANSFERRED IEPF-4 ‘while effecting transfer’ means immediately/simultaneously
Company shall preserve details of shareholders whose shares are transferred to IEPF Suspense A/c (in name of Company)

10. Regular compliance - Rule 5
* Transfer of funds and thereafter file IEPF-1 within 30 days— Rule 5 for matters u/s.125(2)(a) to (n).. Rule 5 (7) refers to (h) to (m) of the said section….
* Maintain records of investors whose funds transferred
* Identify unclaimed amount u/s.125(2) as on AGM date till completion of 7 years and file IEPF-2 separately for each year, within 90 days of AGM - Rule 5(8)

11. Regular Compliance - rule 6 Revised
Shares credited to Demat account to be opened by the IEPF Authority within 30 days of such shares due for transfer
Corporate Action instead of physical transfer or using DIS
in respect of unpaid and unclaimed dividend for 7 consecutive years which would get over in next 3 months
Less: Court/Tribunal/Statutory Authority restraining transfer of shares and payment of dividend
simultaneously, 3 months before such contemplated transfer, publish on own website + advertisement in leading newspaper in English and regional language having wide circulation

12. Board shall authorise CS or other person to sign necessary documents …
Board shall authorise CS or other person to sign necessary documents ….. For eg issue of duplicate certificates, instructing the Depository for Corporate action
Furnish to IEPF details of shares transferred in IEPF-4 - ‘while effecting transfer’ means immediately/simultaneously
Company shall preserve details of shareholders whose shares are transferred to IEPF Suspense A/c (in name of Company)
After transfer of shares, if any bonus, split, consolidation, fraction etc. to be transferred to IEPF Suspense A/c - Rule 6(8)
Any further dividend, after transfer of shares, transfer such amount of dividend on shares so transferred to IEPF - per Rule 6(12)
Voting rights to remain frozen - Rule 6(6)

13. Transfer of Physical shares
Physical shares in possession
Cancel share certificates and do a credit Corporate action crediting IEPF Authority and move shares in ROM to Depository account… File IEPF 4 Rule 6(5)
Physical shares not in possession
Where certificates not available .. Follow procedure for issue of Duplicate… Application by person authorized
Cancellation remark “ Issued in lieu of share certificate no … for purpose of transfer to IEPF” “duplicate”
Credit CA and preserve records…infinity period
File IEPF 4

14. Transfer of Demat shares
Shares held in Demat Form
Held in NSDL or CDSL
Carry out a corporate action separately for each depository….
Debit the investors account and credit the IEPF Authority account
Depository to effect the transfer respectively.
PRE SUPPOSES TWO ACCOUNTS BY IEPF AUTHORITY IN THE 2 DEPOSITORIES

15. Regular Compliance - Rule 6 & 8
Inform to IEPF Authority in IEPF-3 within 30 days of end of FY about court/tribunal/statutory authority restraining such transfer of shares and payment of dividend
File IEPF-6 within 30 days of end of FY for amount due to be transferred in next FY [Rule 8(1)]
Within 30 days of closure of its accounts for the FY, details of funds due for transfer as per IEPF 6 and actuall amount transferred with reasons for deviation [Rule 8(2)]
First instance would be in 2017

16. Regular compliance
Ensure while handling claim for shares, transmission process is first completed - Rule 7(8)
one claimant, one consolidated claim in a FY - Rule 7(10)
Verify documents of claimant asap and send verification report to IEPF Authority within 15 days of receipt of claim - in the format to be specified by IEPF Authority along with documents submitted by Claimant. Rule 7 (9)

17. Practical issues

18. Rule 5 - IEPF-2 related issue
IEPF-2: Unpaid and unclaimed as on AGM date ?
IEPF-2: Separately for each year till completion of 7 years
Lot of data and duplicate data with IEPF authority - may create confusion if not handled properly
IEPF-2 requires details of small shareholders and small depositors. Term ‘small depositor’ not defined? Cos Act definition Nominal Value 20k
Handling of shares held in Clearing member Pool a/c

19. IEPF related- issues
Number of Shares to be transferred to the Fund is not clear if the holdings change (due to corporate action or transactions) during the 7 year period being considered for unclaimed and outstanding dividend
whether closure of accounts means approval of financial statements? Rule 8(2)
Where shares and/or amount claimed and paid to claimant by IEPF Authority, same needs to be communicated to Company - for effecting subsequent corporate action. No provision for this.
For how long company to preserve records where shares/funds given back to claimant?

20. Rule 7(8)- transmission related issue
For shares in demat form, transmission is handled by DP. How will company handle this?
What could be the number of accounts to be opened and operated by the IEPF Authority….
One each in NSDL and CDSL and probably one separately in either of the 2 Depositories for shares held in physical being credited to the IEPF Authority

21. Other issues
Shareholders details would be public and prone to misuse (by publishing on website and newspaper advertisement)…. Companies advised to keep some check and balances….
SOME GOOD SAMARITANS ON THE PROWL..
After reading advertisement or upon receipt of intimation, if claim is filed 1/few days before transfer of shares in favour of IEPF Authority - no time would be left with Company/RTA.
What happens to Clause 5A of LA - shares could not be allotted due to insufficient information - and kept in Demat Suspense A/c by Company

22. FORM NAME
RULES
PURPOSE
PERSON RESPONSIBLE
TYPE OF COMPLIANCES
COMPLIANCES
Form No. IEPF-1
Rule 5 (4) of IEPF
Statement of amounts credited to Investor Education and Protection Fund
Company
General
Along with a copy of challan / acknowledgement (in case of NEFT) as required, furnish a statement containing details of such transfer to the Authority within 30 days of the submission of the challan.
Form No. IEPF-2
Rule 5 (8) of IEPF
Statement of unclaimed and unpaid amounts
Immediate
Intimate the Authority within a period of 90 days after the holding of Annual General Meeting (AGM) or the date on which AGM should have been held or in case of extension of AGM and every year thereafter till completion of 7 years period.
Form No. IEPF-3
Section 124 (6) of the Companies Act, 2013 and Rule 6 (3) of IEPF
Statement of shares and unclaimed or unpaid dividend not transferred to the Investor Education and Protection Fund
If there is any specific order of Court or Tribunal or statutory authority restraining any transfer of such shares and payment of dividend then company shall not transfer such shares to the Fund.
Furnish details of such shares and unpaid dividend within 30 days from the end of financial year along with the copy of the order
Form No. IEPF-4
Rule 6 (5) of IEPF
Statement of shares transferred to the Investor Education and Protection Fund
After the completion of transfer of shares, furnish a statement to the Authority containing details of such transfer.

23. Person making application
Form No. IEPF-5
Section 125 (3) of the Companies Act, 2013 and Rule 7 (1) of IEPF
Application to the authority for claiming unpaid amounts and shares out of Investor Education and Protection Fund (IEPF)
Person making application
General
Any person claiming shares, unclaimed dividend, matured deposits, matured debentures, application money due for refund or interest thereon, sale proceed of fractional shares, redemption proceeds of preference shares, etc. or has been transfer to the fund, make an application along with the feewith the Authority.
Any person whose amount referred to in clause (a) to (d) of 205C (2) of the Companies Act, 1956 transferred to IEPF is also entitled to get refund as per proviso of sub section 3 of section 125 of the Companies Act, 2013 by filing Form No. IEPF-5 with the Authority.
From No. IEPF-6
Rule 8 of IEPF
Statement of unclaimed or unpaid amounts to be transferred to the Investor Education and Protection Fund
Company
Immediate
The Company is required to file Form No. IEPF-6 twice in a year:
At the end of the financial year:
(i)      The statement wrt amount due to be transferred to the Fund in the next financial year be intimated within 30 days of the end of financial year.
After closure of the accounts for the financial year:
(ii)    The statement stating reasons of deviations, if any, of the amounts detailed in point no. (i) above and actual amount transferred to the Fund be intimated within 30 days of the closure of its account for the financial year and also in case of extension of AGM.

24. (ii) Authority’s website
Websites
Rule 5 (8) of IEPF
Statement or information through Form No. IEPF-2 containing following information:
Company
Immediate
Within a period of 90 days after the holding of Annual General Meeting (AGM) or the date on which AGM should have been held upload a statement or information through Form No. IEPF-2 on:
(i)       The names and last known address of the person entitled to receive the same
(i)                Company’s website
(ii)     The nature of the amount
(ii)              Authority’s website
(iii)   The amount to which each person is entitled
(iii)            Any other website as may be specified by the Government
(iv)   The due date for transfer into the IEPF Fund
(v)     Such other information as may be considered relevant for the purposes.
Newspaper
Rule 6 (3) of IEPF
Details of shareholders and shares due for transfer
Inform at the latest available address, the shareholder concern regarding transfer of shares 3 months before the due date of transfer of shares publish a notice in the following:
(i)                In the leading newspaper in English and regional language having wide circulation
(ii)              Company’s website

25. Preservation of documents
Rule 6 (4)
Company
General
The company duplicate certificates and copy of challan / acknowledgement (in case of NEFT) as per Rule 5 for records.

26. “I follow the process”
–M S Dhoni

27. THANK YOU
4/5/2019