Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2021

Last updated: 11 June 2021

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The Ministry of Corporate Affairs has issued the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2021. These new rules, effective from their publication date, introduce specific procedures for the transfer of shares to the IEPF. They clarify how shares and their associated benefits are to be credited to the Authority's DEMAT account, including provisions for physical share transfers and corporate actions. The rules also outline the process for handling shares during company delisting or winding up, ensuring investor protection.

MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 09th June, 2021 G.S.R. 396(E).-In exercise of the powers conferred by sub-sections (1), (2), (3), (4), (8), (9), (10) and (11) of section 125, sub-section (6) of section 124 and sub-sections (9) and (9A) of section 90 read with section 4

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FAQ :

These are amendments to the existing 2016 rules, introduced by the Ministry of Corporate Affairs, to further regulate the accounting, auditing, transfer, and refund processes related to the Investor Education and Protection Fund Authority.

These rules come into force on the date of their publication in the official Gazette.

Shares are to be credited to the Authority's DEMAT account within thirty days of becoming due for transfer. Companies must follow specific procedures for both dematerialised and physical share transfers, including informing depositories or issuing new certificates.

All resultant benefits arising from such shares, except for right issues, such as bonus shares or split shares, shall also be credited to the Authority's DEMAT account.

If a company is delisted, the Authority can surrender shares on behalf of shareholders, with proceeds credited to the Fund. In case of winding up, the Authority may surrender securities to receive entitled amounts for the security holder, which will also be credited to the Fund.

Shares transferred to the Authority are to be transferred without any restrictions, and no application can be filed to claim them back from the Authority. However, voting rights on these shares remain frozen.