MCA Clarification on Due Date for Transfer of Shares to IEPF Authority (Due Date extended for Cases falling due on 31 May 2017 under IEPFA Rules)
A. MCA Clarification on Due Date for Transfer of Shares to IEPFA
MCA has clarified that due date for transfer of shares by companies to demat account of IEPFA will be notified later (i.e. extended till further information), where the same was falling due on 31 May 2017 under the IEPFA Rules. It may be noted that earlier MCA had issued procedural guidelines in this regard and had later withdrawn the same, may be due to pending formalities in opening of demat accounts.
However, the companies have been advised to complete the requisite formalities as per IEPFA Rules without waiting for announcement of fresh dates. Further, the companies which have already published notice in newspaper and have sent notices to the shareholders as well, need not serve the notice again.
B. MCA Withdraws General Circular 3/2017
The MCA has issued General Circular No. 5/2017 dt. 16 May 2017 to withdraw it’s General Circular No. 3/2017 earlier issued on 27 Apr. 2017 relating to procedure for Transfer of Shares to IEPF Authority, before 31 May 2017, under the IEPFA Rules. The subject matter is under review with the Ministry and fresh instructions are likely to be issued after the review.
C. Procedure for Transfer of Shares by Companies to IEPFA
1. 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 30th 2017 and May 15th 2017 respectively. (NSDL File Formats)
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 Co. (Rs.)|
|Upto Rs. 5 crore||2,700|
|Above Rs.5 crore and upto Rs. 10 crore||6,750|
|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.