Investor Education and Protection FundAuthority (Accounting, Audit, Transfer and Refund)Second Amendment Rules, 2019 - F. No. 05/02/2019-IEPF - G.S.R. 571(E) - Companies Law

MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 14th August, 2019 G.S.R. 571(E).- In exercise of the powers conferred under sub-sections (1), (2), (3), (4), (8), (9), (10) and (11) of section 125 and sub-section (6) of section 124 read with section 469 of the Companies Act, 2013 (18 of 2013) , the Central Government hereby makes the following rules, further to amend the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 , namely:- 1. (1) These rules may be called the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2019. (2) The provisions of these rules, Other than rule 6 (i), 6 (iv), 6 (v), 6(vi), 6(vii) and 6 (viii), shall come into force with effect from the 20th day of August, 2019. (3) The provisions of rule 6 (i), 6 (iv), 6 (v), 6(vi), 6(vii) and 6 (viii), shall come into force with effect from the 20th day of September, 2019. 2. In the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (hereinafter referred to as the principle rules), in rule 2 ,- (i) in sub-rule (1), in clause (d), after the words and includes any other entity which is required to transfer any fund to the Investor Education and Protection Fund in accordance with any Act or statute governing it , the words and any transferee company in respect of the assets and liabilities of transferor company shall be inserted ; (ii) in sub-rule (1), in clause (da), for the word namely , the word including shall be substituted ; (iii) in sub-rule (1), clause (g) shall be omitted. 3. In the principal rules , in rule 3, - (i) in sub-rule (4), in clause (a), the words, brackets and letter except clause (g) shall be omitted; (ii) in sub-rule (4), in clause (b), in sub-clause (ii), after the words State Government , the words the Central Government shall be inserted. 4. In the principal rules, in rule 5 ,- (i) for sub-rule (1), the following sub-rule shall be substituted, namely:- (1) Any amount required to be credited by the companies to the Fund as provided under clauses (a) to (n) of sub-section (2) of section 125 of the Act shall be remitted online along with a Statement in Form No. IEPF 1 containing details of such transfer to the Authority within a period of thirty days of such amounts becoming due to be credited to the Fund. ; (ii) sub-rules (2), (3) and (4) shall be omitted ; (iii) After sub-rule (4),the following sub-rule shall be inserted, namely:- (4A) The companies which have transferred any amount referred to in clauses (a) to (d) of sub-section (2) of section 205 C of the Companies Act, 1956 (1 of 1956) to Investor Education and Protection Fund or Central Government, but have not filed the statement or have filed the statement in any format other than in excel template, as required under sub-rule (1) of rule 5, shall submit details mentioned in sub-rule (1) of rule 5 in Form No. IEPF 1A along with excel template within sixty days of notification of these amended rule. ; (iv) in sub-rule (6), for clause (c), the following clause shall be substituted, namely:- (c) The company shall maintain the record filed under sub rule (1) in the same format along with all supporting documents and the Authority shall have the powers to inspect such records. ; (v) for sub-rule (8), the following sub-rule shall be substituted, namely:- (8) Every company shall within a period of sixty days after the holding of Annual General Meeting or the date on which it should have been held as per the provisions of section 96 of the Act, whichever is earlier and every year thereafter till completion of the seven years period, identify the unclaimed amounts, as referred in subsection (2) of section 125 of the Act, as on the date of closure of financial year the account of which are to be adopted in the Annual General Meeting as per sub-section (1) of section 137 of the Act, separately furnish and upload on its own website and also on website of Authority or any other website as may be specified by the Government, a statement or information of unclaimed and unpaid amounts separately for each of the previous seven financial years through Form No. IEPF-2, containing following information, namely:- (a) the names and last known addresses of the persons entitled to receive the sum; (b) the nature of amount; (c) the amount to which each person is entitled; (d)the due date for transfer into the Investor Education and Protection Fund; and (e) such other information as may be considered necessary . 5. In the Principle rules , in rule 6 - (i) in sub-rule (1), in the first proviso, after the worlds any dividend warrant , the words or any dividend amount has been credited to bank account of the owner of such shares shall be inserted; (ii) in sub-rule (1), after third proviso, the following Explanation shall be inserted, namely:- Explanation.- For removal of all doubts, it is hereby clarified that all shares in respect of which dividend has been transferred to Investor Education and Protection Fund on or before the 7th September 2016, shall also be transferred by the company in the name of Investor Education and Protection Fund ; (iii) for sub-rule (5) the following sub-rule shall be substituted, namely:- (5) While effecting such transfer, the company shall send a statement to the Authority in Form No. IEPF-4 within thirty days of the corporate action taken under clause (c) of sub-rule (3) of rule 6 containing details of such transfer and the company shall also attach a copy of the public notice published under clause (a) of sub-rule (3) of rule 6 in Form No IEPF-4. . (iv) for sub-rule (7), the following sub-rule shall be substituted, namely:- (7)The company shall maintain all such statements filed under sub rule (5) in the same format along with all supporting documents and the Authority shall have the powers to inspect such records. ; (v) for sub-rule (8), the following sub-rule shall be substituted, namely:- (8) All benefits accruing on such shares like bonus shares, split, consolidation, fraction shares and the like except right issue shall also be credited to such DEMAT account [by the company which shall send a statement to the Authority in Form No. IEPF-4 within thirty days of the corporate action containing details of such transfer.] . 6. In the Principle rules , in rule 7 , (i) for sub-rule (2), the following sub-rule shall be substituted, namely:- (2) Upon submission, Form No. IEPF-5 shall be transmitted online to the Nodal Officer of the company for verification of claim: Provided that the claimant after making an application in Form No. IEPF-5 under sub rule 1, shall send original physical share certificate, original bond, deposit certificate, debenture certificate, as the case may be, along with Indemnity Bond, Advance Receipts, any other document as enumerated in Form No. IEPF-5, duly signed by him, to the Nodal Officer of the concerned company at its registered office for verification of the claim. ; (ii) for sub-rule (2A), following sub-rule shall be substituted, namely:- (2A) Every company which is required to credit amounts or shares to the fund or has deposited the amount or transferred the shares to the Fund shall nominate a Nodal Officer, who shall either be a Director or Chief financial Officer or Company Secretary of the company, for the purposes of verification of claims and coordination with Investor Education and Protection Fund Authority: Provided that a company may appoint one or more Officer as Deputy Nodal Officer to assist the Nodal Officer for the purposes of verification of claim and for coordination with Investor Education and Protection Fund Authority: Provided further that the Nodal Officer shall be solely liable for all actions of any officer appointed as Deputy Nodal Officer: Provided also that in case a company fails to appoint Nodal Officer, every director of the company shall be deemed to be nodal officer and be liable for any failure to comply with requirement of these rules. ; (iii) after sub-rule (2A), the following sub-rule shall be inserted, namely:- (2B) The details of the Nodal Officer and Deputy Nodal Officer duly indicating his or her designation, postal address, telephone and mobile number and company authorized e-mail ID shall be communicated to the Investor Education and Protection Fund Authority in Form No. IEPF 2 within fifteen days from the date of publication of these rules and the company shall display the name of Nodal Officer and his e-mail ID on its website: Provided that any change in the Nodal Officer or his details shall be communicated to the Authority through Form No. IEPF-2 within seven days of such change along with board resolution thereof. ; (iv) for sub-rule (3), the following sub-rule shall be substituted, namely:- (3) The company shall, within thirty days from the date of receipt of claim, send an online verification report to the Authority after verification of details in Form No. IEPF-5 in the format specified by the Authority along with all the documents submitted by the claimant and shall attach the scanned copy of all the original documents submitted by the claimant in physical form duly certified by its Nodal Officer alongwith the e-verification report along with a scanned copy of both sides of original physical share certificate or original bond or deposit or debenture certificate/s duly cancelled and certified: Provided that if the online verification report is not sent by the company within thirty days of filing of claim, the company may do so by paying additional fee of fifty rupees for every day subject to maximum of two thousand and five hundred rupees: Provided further that the company shall be liable to maintain the original documents submitted to it by the claimant and shall produce such documents whenever required: Provided also that in case of non-receipt of verification report along with documents by the Authority after the expiry of sixty days from the date of filing of Form No. IEPF-5, the Authority may reject Form No. IEPF-5, after sending a communication to the claimant and the concerned company, on the e-mail address of the claimant and the company, to furnish response within a period of fifteen days: Provided also that for failure to submit verification report of the claim in accordance with these rules, the company and its Nodal Officer shall be punishable as per the provisions of the Act. Explanation. -In case (i) loss of original physical share certificate or original bond or deposit or debenture certificate or proof of entitlement, the company and the claimant shall follow the procedure as laid down in the Companies (Share Capital and Debenture) Rules, 2014 , the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, guidelines, procedures and circulars issued from time to time and Schedule III of these rules and attach certified copies of all documents as may be required under the said rules or guidelines with the e-verification report; (ii) In addition, the company shall attach a scanned copy of both sides of share certificate generated under clause (d) of sub-rule (3) of rule 6 of these rules along with the e-verification report;(iii) The Company shall be solely responsible for collecting original physical share certificate or original bond or deposit or debenture certificate or proof of entitlement from the claimant and shall be liable for any misuse thereof. ; (v) for sub-rule (7), the following sub-rule shall be substituted, namely:- (7) Where the Authority, on examining any application for claim, finds it necessary to call for further information or finds such application or e-form or document to be defective or incomplete in any respect, the Authority shall give intimation of such information called for or defects or incompleteness, by e-mail on the email address of the claimant and the company, which has filed such application or e-form or document, directing him or it to furnish such information or to rectify such defects or incompleteness or to re-submit such application or e-Form or document within fifteen days from the date of receipt of such communication, failing which the Authority may reject the claim or e-form No. IEPF-5: Provided that if such information or incompleteness is called from the claimant, he shall file the e-form and shall send such documents as called for within fifteen days, duly signed by him, to the Nodal Officer of the concerned company at its registered office for verification of the claim and company shall send a revised verification report: Provided further that if any such information or incompleteness is called from the company, the company shall file the revised verification report and shall send such documents as called for within thirty days: Provided also that the provisions of sub-rule (3) of rule 7 shall apply mutatis mutandis to this sub-Rule. ; (vi) for sub-rule (8), the following shall be substituted, namely:- (8) In case, claimant is a legal heir or successor or administrator or nominee of the registered share holder, the claimant shall ensure to submission of self-attested scanned copy of all documents detailed in Schedule II of these rules online along with the Form No. IEPF-5: Provided that in case of loss of securities held in physical form, he has to ensure to submission of self-attested scanned copy of additional documents detailed in Schedule III of these rules online along with the Form No. IEPF-5: Provided further that the claimant shall submit in original all these documents duly signed by him, to the Nodal Officer of the concerned company at its registered office for verification of the claim. ; (vii) in sub-rule (9), after the words the claim of such claimant , the following shall be inserted, namely:- through its e-verification report: Provided that the authority shall dispose such request of transfer or transmission based on the e-verification report of the company subject to verification of such request. ; (viii) sub-rule (10) shall be omitted. (ix) in sub-rule (11), after clause (a), the following clause shall be inserted, namely:- (b)Any fraudulent claim by the claimant shall be deemed to be fraud within the meaning of section 447 of the Act and the claimant shall be liable accordingly. (c) If any person deceitfully personates an owner of any security or of any share warrant or coupon issued in pursuance of this Act and thereby files any claim to obtain or attempts to obtain any such security or interest or any such warrant or coupon due to the lawful owner, he shall be punishable under sections 57, 447 and 448 of the Act. . 7. in rule 8, sub rules (1) and (2) shall be omitted. 8. The SCHEDULE shall be numbered as Schedule I and after Schedule I as so numbered, the following Schedules shall be inserted, namely:- Schedule II Documents to be submitted to the Authority to register transmission of securities A. Documentary requirement for securities held in physical mode 1. Where the shares are held singly with nomination: 1.1. Duly signed transmission request form by the nominee. 1.2. Original or copy of death certificate duly attested. 1.3. Self-attested copy of PAN card. 1.4. Original share certificate(s). 1.5. Any other government ID proof of the nominee. 2. Where the shares are held singly without nomination, the following documents in addition to the documents specified at paragraph 1 are required: 2.1 Affidavit from all the legal heirs made on appropriate non-judicial stamp paper- to the effect of identification and claim of legal ownership to the securities: Provided that in case the legal heir(s) or claimant(s) is named in the succession certificate or probate of will or Letter of Administration, an Affidavit from such legal heir(s) or claimant(s) alone would be sufficient. 2.2 For value of securities up to ₹ 2,00,000 (Rupees Two lakh only) per issuer company as on date of application, one or more of the following documents: (a) Succession certificate or probate of will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) (b)In the absence of the documents as mentioned at (a) above, (i). No objection certificate from all legal heir(s) executed by all the legal heirs of the deceased holder not objecting to such transmission (or) copy of Family Settlement Deed duly notarized and (ii). An Indemnity bond made on appropriate non-judicial stamp paper indemnifying the STA or Issuer Company. 2.3 For value of securities more than ₹ 2,00,000 (Rupees Two lakh only) per issuer company as on date of application: Succession certificate or probate of will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) 3. Where the shares are held jointly with nomination: 3.1 Duly signed transmission request form by the nominee. 3.2 Original or copy of death certificate(s) of all the joint holders duly attested 3.3 Self-attested copy of PAN card. 3.4 Original share certificate(s). 3.5 Any other government ID proof of the nominee. 4. Where the shares are held jointly without nomination, the following documents in addition to the documents specified at paragraph 3 are required: 4.1 Affidavit from all the legal heirs made on appropriate non-judicial stamp paper- to the effect of identification and claim of legal ownership to the securities. Provided that in case the legal heir(s) or claimant(s) is named in the succession certificate or probate of will or Letter of Administration, an Affidavit from such legal heir(s) or claimant(s) alone would be sufficient. 4.2 For value of securities upto ₹ 2,00,000 (Rupees Two lakh only) per issuer company as on date of application, one or more of the following documents: (a) Succession certificate or probate of will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925.(39 of 1925) (b) In the absence of the documents as mentioned at (a) above, (i). No objection certificate from all legal heir(s) executed by all the legal heirs of the deceased holder(s) not objecting to such transmission (or) copy of Family Settlement Deed duly notarized and (ii). An Indemnity bond made on appropriate non-judicial stamp paper indemnifying the STA or Issuer Company. 4.3 For value of securities more than ₹ 2,00,000 (Rupees Two lakh only) per issuer company as on date of application:Succession certificate or probate of will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) B. Documentary requirement for securities held in DEMAT mode 1. Where the shares are held singly with nomination: 1.1. Duly signed transmission request form by the nominee. 1.2. Original or copy of death certificate duly attested 1.3. Self-attested copy of PAN card. 1.4. Copy of transaction statement duly certified by Depository Participant. 1.5. Any other government ID proof of the nominee. 2. Where the shares are held singly without nomination, the following documents in addition to the documents specified at paragraph 1 are required: 2.1 Affidavit from all the legal heirs made on appropriate non-judicial stamp paper- to the effect of identification and claim of legal ownership to the securities. Provided that in case the legal heir(s) or claimant(s) is named in the succession certificate or probate of will or Letter of Administration, an Affidavit from such legal heir(s) or claimant(s) alone would be sufficient. 2.2 For value of securities upto ₹ 2,00,000 (Rupees Two lakh only) per issuer company as on date of application, one or more of the following documents: (a) Succession certificate or probate of will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925. (b) In the absence of the documents as mentioned at (a) above, (i) No objection certificate from all legal heir(s) executed by all the legal heirs of the deceased holder not objecting to such transmission (or) copy of Family Settlement Deed duly notarized and (ii) An Indemnity bond made on appropriate non-judicial stamp paper indemnifying the STA or Issuer Company. 2.3 For value of securities more than ₹ 2,00,000 (Rupees Two lakh only) per issuer company as on date of application:Succession certificate or probate of will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) 3. Where the shares are held jointly with nomination: 3.1 Duly signed transmission request form by the nominee. 3.2 Original or copy of death certificate(s) of all the joint holders duly attested 3.3 Self-attested copy of PAN card. 3.4 Copy of transaction statement duly certified by Depository Participant. 3.5 Any other government ID proof of the nominee. 4. Where the shares are held jointly without nomination, the following documents in addition to the documents specified at paragraph 3 above are required: 4.1 Affidavit from all the legal heirs made on appropriate non-judicial stamp paper- to the effect of identification and claim of legal ownership to the securities: Provided that in case the legal heir(s) or claimant(s) is named in the succession certificate or probate of will or Letter of Administration, an Affidavit from such legal heir(s) or claimant(s) alone would be sufficient. 4.2 For value of securities upto ₹ 2,00,000 (Rupees Two lakh only) per issuer company as on date of application, one or more of the following documents, namely:- (a) Succession certificate or probate of will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) (b) In the absence of the documents as mentioned at (a) above, (i) No objection certificate from all legal heir(s) executed by all the legal heirs of the deceased holder(s) not objecting to such transmission (or) copy of Family Settlement Deed duly notarized and (ii) An Indemnity bond made on appropriate non-judicial stamp paper indemnifying the STA or Issuer Company. 4.3 For value of securities more than ₹ 2,00,000 (Rupees Two lakh only) per issuer company as on date of application:Succession certificate or probate of will or letter of administration or court decree, as may be applicable in terms of Indian Succession Act, 1925. (39 of 1925) Schedule III Documents to be submitted to the Authority in case of loss of securities held in physical mode. 1. Notarised copy of FIR/ Police Compliant containing information of security holder, holding details, folio number and distinctive numbers of share certificate. 2. Surety Affidavit of value equal to market value that of shares as on date of execution along with his Proof of identity like Pan Card of sureties duly attested by Notary. 3. Indemnity bond by security holder on a non-judicial stamp paper of requisite value duly attested by Notary Public by the person, in whose name the original share certificate are being issued that he has not sold / disposed off the involved shares or acted in any manner by which any interest of third party would have been created. 4. Copy of advertisement issued in at least one English language national daily newspaper having nationwide circulation and in one regional language daily newspaper published in the place of registered office of company, if the market value of the shares is greater than ₹ 10,000. Schedule IV Procedure to be followed while disposing the claims The company shall be responsible for verifying the genuineness and entitlement of the claimant by doing the necessary verification through Aadhar Card, PAN Card, Passport, any other Government ID proof, matching of signature and photo etc. The company shall verify such documents as may be required and enumerated in form IEPF-5 and retain the originals submitted by the claimant. The company shall be responsible to verify the amount and shares involved in the claim according to the e-filings made by it to the Authority. The company shall submit e-verification report to the Authority. 2. The Authority shall follow following indicative procedures while disposing the claims: (i) Completeness of all the information provided in Form No. IEPF-5. (ii) Matching of information in the e-form with the scanned documents attached with the claim. (iii) Affidavit and other supporting documents viz. Gazette Notification for name change, marriage certificate, other identity proof etc. for change or variations in name in various documents, share certificates etc. (iv) Affidavit and other supporting documents for change or variations in address in various documents, share certificates, current address and address recorded in share certificate or Form No. IEPF 4 or other places. (v) Indemnity on stamp paper of appropriate value in the name of claimant as per Stamp Act (vi) Verification of the PAN details of the Claimant with Client Master List (CML) and with the Government data base. (vii) In case of claim related to physical securities, authentication of scanned copy of the certificate attached with Form No. IEPF-5 e-form by the company. (viii) Verification and matching of DEMAT Account No., Name of claimant, PAN, Address from the CML. (ix) Matching of CML of unclaimed suspense account in case the transfer of shares has taken place from the unclaimed suspense account from the company. Verification of transaction statement of the unclaimed suspense account of the company. At any point of time, details of every investor whose shares have been transferred from unclaimed suspense account, may be called from depository (x) The details of amount due to the claimant are to be verified from e form IEPF-1 or INV-1 or IEPF-1A. In case of non- availability of the data in MCA system, proportionate deductions in the refund amount can be made. . 3. In addition to the above, the authority may seek any other documents, clarification etc. from the claimant or the company as and when required for disposing the claim. 9. In the Principal Rules , for the Forms IEPF-1 , IEPF-2 , IEPF-4 and IEPF-5 , the following Forms shall be substituted, namely:- [F. No. 05/02/2019-IEPF] MANOJ PANDEY, Jt. Secy. Note: The principal rules were published in the Gazette of India vide number G.S.R. 854 (E), dated the 5th September, 2016 and amended vide notification number G.S.R. 178(E) dated 28th February, 2017, G.S.R.1267 (E) dated 13th October, 2017 , G.S.R. 472 (E) dated 22.05.2018 and G.S.R. 343(E) dated 1st May, 2019 .