The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules 2016 were notified by Ministry of Corporate Affairs (hereinafter referred as “MCA”) on September 06, 2016, wherein companies registered under the Companies Act 2013 were required to transfer all unclaimed/unpaid shares in respect of which dividend have remained unclaimed for last 7 years to the IEPF Suspense Account.
Subsequently, IEPF Amendment Rules, 2017 were notified on February 28, 2017 wherein existing rule of transfer to Suspense Account was amended extending the due date of transfer if period of 7 years had been completed or was being completed during the period from September 07, 2016 to May 31, 2017, then due date for transfer of such shares shall be May 31, 2017.
To facilitate the transfer MCA vide its Circular 03/2017 dated April 27, 2017 stated that for purpose of transferring shares (Physical or in Dematerialized form) to the Demat Account of IEPF Authority, the IEPF Authority was planning to open a special Demat account with National Securities Depository Limited (hereinafter referred to as “NSDL”). Companies were also required to provide information of shareholders whose shares are being transferred to NSDL. The NSDL will also charge fees from companies for uploading and maintaining records of transferred shares.
Now, MCA vide its Circular No. 05/2017 dated May 16, 2017 withdrew the above circular as the subject matter was being reviewed and stated that fresh instruction son the matter will be issued shortly.
Further, MCA through its Circular No. 06/2017 dated May 29, 2017 has given public notice that the process of transfer of shares from Company account to Demat account of IEPF authority is being finalized and IEPF Authority is considering to open special Demat account with NSDL. Therefore, till opening of Demat account, the due date of transfer of shares is extended and MCA will soon notify the due date for transfer of shares.
It is pertinent to note that, as per the circular issued, the MCA has advised companies to complete all formalities for transfer of shares without waiting for the fresh dates. Further, companies which have already published the notice of transfer in the newspapers and send notices to individual shareholder, are not required to issue fresh notices because of this extension.
We will apprise you when a new notification is issued by the MCA in this regard.