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Investor Education and Protection Fund Authority 
(Accounting, Audit, Transfer and Refund) Rules, 2016

Ministry of Corporate Affairs with its powered conferred under provisions of Section 124, 125 read with Section 469 of the Companies Act, 2013 (“Act”) introduced Rules for Investor Education and Protection Fund (“IEPF”) established under Section 125 of the Act with effecting from September 7, 2016.

Content of Rules

In the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016 provisions regarding management of IEFP, the manner in which the fund shall be managed, reported, accounted and how the unclaimed Shares and Dividend shall be transferred to the IEPF and the procedure through which the shareholder can claim the refund has been laid down.

Important provisions of Rules

Rule 3


  • Investor Education and Protection Fund Authority (“Authority”) shall manage the IEPF which is credited mainly from unpaid Dividend which remains unpaid or unclaimed for a period of Seven years or more lying in Unpaid Dividend Account of the Company and also all amount payable as mentioned in clause (a) to (n) of subsection (2) of Section 125 of the Act.
  • In addition to the above all shares in respect of which dividend has not been paid or claimed for seven Consecutive years or more shall be transferred by the Company to such IEPF suspense account as per the manner specified in Rule 6.
  • Further in case of term deposits and debentures, due unpaid or unclaimed interest shall also be transferred to the fund.

Rule 5

  • Any amount required to be credited by the Company to the IEPF shall be remitted into specified branched of Punjab National Bank within period of thirty days of such amounts becoming due to be credited to the fund.
  • The amount may also be transferred electronically as may be specified by Central Government.
  • Company shall file with the concerned authority one copy of challan evidencing the deposit.
  • The Company shall file Form IEPF 1 containing details of the amount transfer to IEPF within 30 days of submission of challan.
  • The Company has to maintain a record as specified under rule of the persons whose unpaid or unclaimed amount has been transferred to the IEPF.
  • Every Company within a period of ninety days after the holding of Annual General Meeting shall file Form IEPF 2 containing a statement of unclaimed and unpaid amount lying with the Company.

Purpose of IEPF 1

The amounts as mentioned in Rule 3 are credited to IEPF upon expiry of seven years from the date they become due for repayment/transferred to the Unpaid Dividend account. When this amount is deposited into this fund, the Company is required to submit the statement of amount deposited into this fund with ROC.

Purpose of IEPF 2

A company having unclaimed and unpaid amount in respect of dividend declared is required to transfer such amount to a Unclaimed Dividend account to be maintained by the company within 7 days of the expiry of 30 days from the date of declaration of the dividend. Claim of the investor shall be met from such account till the end of 7 years from the date of transfer of relative amount. After the end of 7 years of transfer, the pending amount should be transferred to IEPF maintained by the Government.

All companies which have unclaimed and unpaid amounts are required to file an annual statement of the amounts transferred to the Unclaimed Dividend account maintained by the company, till the said period of 7 years. The investor-wise details are also required to be filed in separate xls files. This statement should also include the details of unpaid amounts on deposits, debentures, application money received, interest on deposits/ debentures/ application money, redemption amount of preference shares and sale proceeds of fractional shares.

Rule 6

Manner of transfer of Shares under Section 124(6) to the IEPF

  • As stated earlier all shares in respect of which dividend has not been paid or claimed for seven Consecutive years or more shall be transferred by the Company to IEPF suspense account.
  • Shares may be held either in Physical or in Demat form:

(a) For the purpose of effecting transfer in Demat form the Company Secretary on behalf of such shareholders, shall sign the delivery instruction slips of the depositary participants where the Shareholders has their accounts.

On receipt of the delivery instruction slips, the depositary shall effect the transfer of shares in favour of the IEPF in its record.

(b)  For the purpose of effecting transfer in physical form:

(i) The Company secretary on behalf of the concerned shareholders, shall make a request to the Company, for issue of duplicate share certificates.

(ii) The Company on request, shall issue duplicate share certificate stated on the face of it that “Issued in lieu of Certificate No. _____ for the purpose of transfer to IEPF” with the word “duplicate” shall be stamped in bold letters.

(iii) After issuance of duplicate share certificate, the Company Secretary shall sign the share transfer deed in SH-4 for transferring the shares in favor of IEPF.

(iv) On receipt of duly filled Share transfer form along with duplicate share certificate, the Board or Committee shall approve the transfer.

  • After effecting such transfer, the Company shall file a statement in Form IEPF-4 containing details of such transfer.
  • If the Company gets delisted the Authority shall surrender the securities on behalf of the security holders and transfer the amount to the IEPF.

Note: Before transferring the shares in favour of IEPF the Company shall inform to the shareholder concerned regarding transfer of shares at the latest available address three months before the due date of transfer of shares and also to publish a notice in the leading newspaper in English and regional language and on their website giving the details of such sharholders.

No transactional provision has been given for the above rule i.e. once the rule gets into force the Company shall initiate the procedure immediately and have to transfer the shares on completion of three months.   

Purpose of the Form IEPF 4

Every company which has transferred unpaid and unclaimed dividend after the expiry of seven years to the Investor Education and Protection Fund, is also required to transfer such shares to the Fund. The statement containing all details of such transfer shall be given in Form IEPF-4.

Refunds to the claimants

Rule 7

  • Any security holder whose securities or any amount has been transferred to the IEPF, may claim the shares or the amount as the case may be, by making an application to the authority in Form IEPF 5.
  • After making the online application the claimants shall send the duly signed IEPF 5 form with requisite documents as mentioned in IEPF 5 to the concerned Company for verification of his claim.
  • Within 15 days of receipt of claim the Company shall send a verification report to the Authority.
  • An application received for refund of any claim and duly verified by the concerned company shall be disposed of by the Authority within 60 days from the date of receipt of verification report from the Company.

Purpose of the Form IEPF-5

The person in respect of whom any amount is transferred to the IEPF, can make an application by filing Form IEPF-5 with the Authority set up by MCA that shall further process the application.

Rule 8

The Company shall furnish a statement in Form IEPF 6 within 30 days of end of financial year stating the amounts due to be transferred to the fund in next financial year.

Purpose of the Form IEPF 6

The company shall furnish a statement to the Authority in Form IEPF 6 within thirty days of end of financial year stating therein the amounts due to be transferred to the Fund in the next financial year and the amounts transferred during the current financial year along with reason of deviation in case there is any deviation from the amount stated last year.


Published by

piyush jain
(Company Secretary Trainee)
Category Others   Report

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