MCA Withdraws Instructions on Transfer of Shares to IEPF Authority

MCA withdraws General Circular No. 3/2017 relating to Transfer of Shares to IEPF Authority before 31 May 2017 under IEPFA Rules

MCA General Circular No. 5/2017 dt. 16 May 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.

Transfer of Shares to IEPF Authority: MCA General Circular 03/2017 dt. 27 Apr. 2017 

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 crore6,750
Above Rs.10 crore and upto Rs.20 crore13,500
Above Rs.20 crore22,500

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

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