Investor Education and Protection Fund Authority Accounting Audit Transfer and Refund Second Amendment Rules 2021 [CS Tanveer Singh Saluja]



*MCA Notification No. G.S.R. 785 (E). Dtd. 09th November, 2021

The MCA has notified a new set of rules to amend the existing Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, which shall come into force on the date of its publication in the Official Gazette i.e., 09th November, 2021.

Sr. No.

Amendment

Comments

1

Omission: Rule 7(7) proviso

the words “Advance Receipts”, shall be omitted.

This is certainly a clerical error in the amendment rules. It is stated that in rule 7, in sub-rule (7), in the proviso, the words “Advance Receipts”, shall be omitted. However, in rule 7 the words “Advance Receipts” finds place only in proviso to sub-rule (2).

If the intention of the Ministry is to remove the above-mentioned words from proviso to sub-rule (2) then the amended provisions shall stand as follows:

Upon submission, Form No. IEPF-5 shall be transmitted online to the Nodal Officer of the company for verification of claim:

Provided that the claimant after making an application in Form No. IEPF-5 under sub rule 1, shall send original physical share certificate, original bond, deposit certificate, debenture certificate, as the case may be, along with Indemnity Bond, Advance Receipts, any other document as enumerated in Form No. IEPF-5, duly signed by him, to the Nodal Officer of the concerned company at its registered office for verification of the claim.

2

Substitution: Schedule II

for the words, figures and bracket, “Rs 2,00,000 (Rupees Two Lakh only),” wherever occurring, Rs 5,00,000 (Rupees five lakh only), shall be substituted.

The base limit of ?2 lakhs is increased to ?5 lakhs for various document submission related purposes.  It is advisable to refer to the Schedule II for better understanding.

3

Substitution: Schedule II under heading, “Documents to be submitted to the Authority to register transmission of securities”, under sub-heading “A. Documentary requirement for securities held in physical mode” in item 1, under the heading, “Where the shares are held singly with nomination”

(a) in sub-item 1.1, for the word, “nominee”, the word, “claimant” shall be substituted;

(b) for sub-item 1.2, the following shall be substituted, namely: -

“Copy of death certificate of security holder attested by claimant.”

(c) for sub-item 1.4, the following shall be substituted, namely: -

“The original share certificate is to be sent to the company and scanned copy to be attached with the form”

a. Amendment in 1.1 is for the purpose of convenience and widening the scope.

b. Amendment in 1.2 is to provide that the copy of death certificate shall be attested by the claimant.

c. Amendment in 1.4 is to clarify that the original share certificate shall be sent to the company also scanned copy of the same shall be attached with the form.

4

Substitution, Insertion: Schedule II under heading, “Documents to be submitted to the Authority to register transmission of securities”, under sub-heading “A. Documentary requirement for securities held in physical mode” in item 2, under the heading, “Where the shares are held singly without nomination, the following documents in addition to the documents specified at paragraph 1 are required”

(a) in sub-item 2.2, for clause (a), the following shall be substituted-

“Succession certificate or probate of will or will or letter of administration or Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal”.

(b) for sub-item, 2.3, the following shall be substituted, namely: -

“For value of securities more than 5,00,000 (Rupees Five lakh only) per issuer company as on date of application: Succession certificate or probate of will or will or letter of administration or Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal.”.

(c) after sub-item 2.3 and before item 3, the following explanation shall be inserted, namely: -

“Explanation: (1) The Company may enhance the limit of Rs. 5,00,000 (Rupees Five lakh only) per issuer company in accordance with SCHEDULE VII of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, after taking approval of its Board of Directors and provide copy of Board resolution to Authority at the time of verification of claim.

(2) for the case where will is provided, following documents shall also be required:

(a) Legal heirship certificate issued by Competent Authority;

(b) No Objection Certificate from all legal heirs in favor of the claimant;

(c) Affidavit from witness about confirmation of will wherever alive or death certificate of such witness;

(d) Affidavit with regard to the will as last will and no matter is pending before any court with regard to such will;

(e) Surety affidavit by at least two sureties with their PAN Card.

a. Self-explanatory.

Amended provision:

Succession certificate or probate of will or will or letter of administration or court Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal.

b. Amendment in 2.3 is to bring it in line with the amendments made in 2.2 clause (a).

c. Insertion of explanation after 2.3 is self-explanatory.

 

5

Substitution: Schedule II under heading, “Documents to be submitted to the Authority to register transmission of securities”, under sub-heading “A. Documentary requirement for securities held in physical mode” in item 3, under the heading “Where the shares are held jointly with nomination”

(a) in sub-item 3.1, for the word, “nominee”, the word, “claimant” shall be substituted;

(b) for sub-item 3.2, the following shall be substituted, namely: -

“Copy of death certificate of security holder attested by claimant.”

(c) for sub-item 3.4, the following shall be substituted, namely: -

“The original share certificate is to be sent to the company and scanned copy to be attached with the form”

a. Amendment in 3.1 is for the purpose of convenience and widening the scope.

b. Amendment in 3.2 is to provide that the copy of death certificate shall be attested by the claimant.

c. Amendment in 3.4 is to clarify that the original share certificate shall be sent to the company also scanned copy of the same shall be attached with the form.

6

Substitution, Insertion: Schedule II under heading, “Documents to be submitted to the Authority to register transmission of securities”, under sub-heading “A. Documentary requirement for securities held in physical mode” in item 4, under the heading, “Where the shares are held jointly without nomination, the following documents in addition to the documents specified at paragraph 3 are required”

(a) in sub-item 4.2, for clause (a), the following shall be substituted-

“Succession certificate or probate of will or will or letter of administration or Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal”.

(b) for sub-item, 4.3, the following shall be substituted, namely: -

“For value of securities more than 5,00,000 (Rupees Five lakh only) per issuer company as on date of application: Succession certificate or probate of will or will or letter of administration or Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal.”.

(c) after sub-item 4.3 and before sub-heading ‘B’, the following explanation shall be inserted, namely: -

“Explanation: (1) The Company may enhance the limit of Rs. 5,00,000 (Rupees Five lakh only) per issuer company in accordance with SCHEDULE VII of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, after taking approval of its Board of Directors and provide copy of Board resolution to Authority at the time of verification of claim.

(2) for the case where will is provided, following documents shall also be required:

(a) Legal heirship certificate issued by Competent Authority;

(b) No Objection Certificate from all legal heirs in favor of the claimant;

(c) Affidavit from witness about confirmation of will wherever alive or death certificate of such witness;

(d) Affidavit with regard to the will as last will and no matter is pending before any court with regard to such will;

(e) Surety affidavit by at least two sureties with their PAN Card.

a. Self-explanatory.

Amended provision:

Succession certificate or probate of will or will or letter of administration or court Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal.

b. Amendment in 4.3 is to bring it in line with the amendments made in 4.2.

c. Insertion of explanation after 4.3 is self-explanatory.

 

7

Substitution: Schedule II under heading, “Documents to be submitted to the Authority to register transmission of securities”, under sub-heading “B. Documentary requirement for securities held in DEMAT mode” in item 1, under the heading, “Where the shares are held singly with nomination”

(a) in sub-item 1.1, for the word, “nominee”, the word, “claimant” shall be substituted;

(b) for sub-item 1.2, the following shall be substituted, namely: -

“Copy of death certificate of security holder attested by claimant.”

(c) for sub-item 1.4, the following shall be substituted, namely: -

“Copy of transaction statement duly attested by Claimant”

a. Amendment in 1.1 is for the purpose of convenience and widening the scope.

b. Amendment in 1.2 is to provide that the copy of death certificate shall be attested by the claimant.

c. Amendment in 1.4 is to provide that the copy of transaction statement shall be duly attested by Claimant. In the existing provisions, the requirement was to get it certified by Depository Participant.  

8

Substitution, Insertion: Schedule II under heading, “Documents to be submitted to the Authority to register transmission of securities”, under sub-heading “B. Documentary requirement for securities held in DEMAT mode” in item 2, under the heading, “Where the shares are held singly without nomination, the following documents in addition to the documents specified at paragraph 1 are required”

(a) in sub-item 2.2, for clause (a), the following shall be substituted-

“Succession certificate or probate of will or will or letter of administration or Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal”.

(b) for sub-item, 2.3, the following shall be substituted, namely: -

“For value of securities more than 5,00,000 (Rupees Five lakh only) per issuer company as on date of application: Succession certificate or probate of will or will or letter of administration or Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal.”.

(c) after sub-item 2.3 and before item 3, the following explanation shall be inserted, namely: -

“Explanation: (1) The Company may enhance the limit of Rs. 5,00,000 (Rupees Five lakh only) per issuer company in accordance with SCHEDULE VII of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, after taking approval of its Board of Directors and provide copy of Board resolution to Authority at the time of verification of claim.

(2) for the case where will is provided, following documents shall also be required:

(a) Legal heirship certificate issued by Competent Authority;

(b) No Objection Certificate from all legal heirs in favor of the claimant;

(c) Affidavit from witness about confirmation of will wherever alive or death certificate of such witness;

(d) Affidavit with regard to the will as last will and no matter is pending before any court with regard to such will;

(e) Surety affidavit by at least two sureties with their PAN Card.

a. Self-explanatory.

Amended provision:

Succession certificate or probate of will or will or letter of administration or court Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal.

b. Amendment in 2.3 is to bring it in line with the amendments made in 2.2 clause (a).

c. Insertion of explanation after 2.3 is self-explanatory.

9

Substitution: Schedule II under heading, “Documents to be submitted to the Authority to register transmission of securities”, under sub-heading “B. Documentary requirement for securities held in DEMAT mode” in item 3, under the heading “Where the shares are held jointly with nomination”

(a) in sub-item 3.1, for the word, “nominee”, the word, “claimant” shall be substituted;

(b) for sub-item 3.2, the following shall be substituted, namely: -

“Copy of death certificate of security holder attested by claimant.”

(c) for sub-item 3.4, the following shall be substituted, namely: -

“Copy of transaction statement duly attested by Claimant”

a. Amendment in 3.1 is for the purpose of convenience and widening the scope.

b. Amendment in 3.2 is to provide that the copy of death certificate shall be attested by the claimant.

c. Amendment in 3.4 is to provide that the copy of transaction statement shall be duly attested by Claimant. In the existing provisions, the requirement was to get it certified by Depository Participant.  

10

Substitution, Insertion: Schedule II under heading, “Documents to be submitted to the Authority to register transmission of securities”, under sub-heading “B. Documentary requirement for securities held in DEMAT mode” in item 4, under the heading, “Where the shares are held jointly without nomination, the following documents in addition to the documents specified at paragraph 3 are required”

(a) in sub-item 4.2, for clause (a), the following shall be substituted-

“Succession certificate or probate of will or will or letter of administration or Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal”.

(b) for sub-item, 4.3, the following shall be substituted, namely: -

“For value of securities more than 5,00,000 (Rupees Five lakh only) per issuer company as on date of application: Succession certificate or probate of will or will or letter of administration or Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal.”.

(c) after sub-item 4.3 and before Schedule III, the following explanation shall be inserted, namely: -

“Explanation: (1) The Company may enhance the limit of Rs. 5,00,000 (Rupees Five lakh only) per issuer company in accordance with SCHEDULE VII of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, after taking approval of its Board of Directors and provide copy of Board resolution to Authority at the time of verification of claim.

(2) for the case where will is provided, following documents shall also be required:

(a) Legal heirship certificate issued by Competent Authority;

(b) No Objection Certificate from all legal heirs in favor of the claimant;

(c) Affidavit from witness about confirmation of will wherever alive or death certificate of such witness;

(d) Affidavit with regard to the will as last will and no matter is pending before any court with regard to such will;

(e) Surety affidavit by at least two sureties with their PAN Card.

a. Self-explanatory.

Amended provision:

Succession certificate or probate of will or will or letter of administration or court Decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) or any other Decree or Order of any Court or Tribunal.

b. Amendment in 4.3 is to bring it in line with the amendments made in 4.2.

c. Insertion of explanation after 4.3 is self-explanatory.

11

Substitution, Omission: Schedule III under the heading, “Documents to be submitted to the Authority in case of loss of securities held in physical mode”

(i) in item 1, for the word, “Notarized”, the word, “Self-attested”, shall be substituted;

(ii) in item 2, the words, “value equal to market value that of shares as on date of execution”, shall be omitted;

(iii) in item 4, for letters, figures and symbols, “Rs 10,000”, the letters, figures and symbols, “Rs 5,00,000” shall be substituted.

i. Now, in case of loss of securities held in physical mode, the shareholder can submit self-attested copy of FIR/ Police Compliant instead of a notarized copy.

ii. In the existing provisions, it was required to submit Surety Affidavit of value equal to market value that of shares as on date of execution but with the advent of this amendment, the Surety Affidavit needs not to be of the afore-mentioned value.

iii. Earlier, it was required to give an advertisement in at least one English language national daily newspaper having nationwide circulation and in one regional language daily newspaper published in the place of registered office of company, if the market value of the shares was greater than ?10,000, which is now increased to ?5 lakhs. This amendment is for the benefit of small shareholders.

12

Omission, Insertion: Schedule IV, under the heading, “Procedure to be followed while disposing the claims”, in item 2

(i) sub-item (iv) shall be omitted;

(ii) in sub-item (ix), the words, “verification of transaction statement of the unclaimed suspense account of the company. At any point of time, details of every investor whose shares have been transferred from unclaimed suspense account, may be called from depository.” shall be omitted.

(iii) in sub-item (x), after letters, symbols, figures and words, “IEPF-1 or INV-1 or IEPF-1A” and before the symbol, “.”, the word, letters, symbol and figure, “or IEPF-7” shall be inserted.

Self- explanatory

i. Omitted provision:

Affidavit and other supporting documents for change or variations in address in various documents, share certificates, current address and address recorded in share certificate or Form No. IEPF – 4 or other places.

ii. Amended provision:

Matching of CML of unclaimed suspense account in case the transfer of shares has taken place from the unclaimed suspense account from the company. Verification of transaction statement of the unclaimed suspense account of the company. At any point of time, details of every investor whose shares have been transferred from unclaimed suspense account, may be called from depository.

iii. Amended provision:

The details of amount due to the claimant are to be verified from e form IEPF-1 or INV-1 or IEPF-1A or IEPF-7. In case of non- availability of the data in MCA system, proportionate deductions in the refund amount can be made

 
Link to the Official Gazette Notification:  https://egazette.nic.in/WriteReadData/2021/230981.pdf.
 
Disclaimer: The author is based in Jabalpur and is a Practicing Company Secretary dealing in Corporate, Legal & Taxation services. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Author recommends that professional advice is sought before taking any action on specific issues.
 
The author can also be reached at cstanveersaluja@gmail.com.
 
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