PROCEDURE FOR TRANSFER OF SHARES TO THE IEPF AUTHORITY
Dear Professional Colleagues,
ARTICLE No 1 on Transfer of Share to IEPF
For detailed procedure related to
Transfer of Share to IEPF Account go through the below link and provide feedback
ARTICLE No 2 on Transfer of Share to IEPF
Here I come up with my second article along the practical
aspects and timeline as prepared for one of the listed Company, hope this will be helpful
for you to analyse in details.
(The Shares on which dividend
warrant has not been encashed by the shareholders for a continuous period
during the last seven years)
Sl
No
|
Step
|
Regulatory
provision
|
Action
to be taken
|
Due
Date
|
1
|
All such shares in respect of which dividend has not
been paid or claimed for seven consecutive years or more shall be transferred
to IEPF
|
Section 124(6) of CA, 2013
|
Company to identify and prepare a list of all the
shareholders who have not encashed the dividend warrants for a continuous
period of last seven years, containing the details of name of the
shareholder, Folio No, Demat Account No and number of shares etc, except the
shares on which there is specific order of the court of Tribunal or statutory
authority restraining any transfer of shares and where such shares are
pledged or hypothecated under the provisions of Depositories Act, 1996.
|
31-10-2017
|
2
|
The Shares shall be credited to the demat account of the
Authority to be opened by the Authority for the said purpose, within a
period of thirty days of such shares becoming due to be transferred to
the Fund
|
Rule 6(1) of IEPF Authority (
Accounting, Audit, Transfer and Refund) Rules, 2016 (“IEPF Rules”)
|
30-11-2017
|
|
3
|
Provided that, in case the beneficial owner has encashed
any dividend warrant during the last seven years, such shares shall not be
required to be transferred to the Fund even though some dividend warrants may
not have been encashed.
|
Proviso (1) to Rule 6
|
31-10-2017
|
|
4
|
The due date for transfer of shares, where the
period of seven years has been completed or being completed
during the period from September 7, 2016 to October 31, 2017, shall be deemed
to be October 31, 2017
|
Second Proviso to Rule 6 (1) of IEPF Rules
|
31-10-2017
|
|
5
|
Provided that the transfer of shares by the companies to
the Fund shall be deemed to be transmission of shares and the procedure to be
followed for transmission of shares shall be followed by the companies while
transferring the shares to the Fund.
|
Third proviso to the Rule 6 of IEPF Rules
|
||
6
|
Board of Directors of the Company to pass a resolution
authorizing the company secretary or any other person to sign the necessary
documents.
|
Rule 6(2)
|
Hold a board meeting or pass a resolution by circulation
|
31-07-2017
|
7
|
Display the details of the shareholders whose shares are
proposed to be transferred to the IEPF authority, on the website
|
Rule 6(3)(a)
|
Display on the website
|
31-07-2017
|
8
|
Company shall inform the shareholder concerned regarding
the proposed transfer of shares
|
Rule 6(3)(a)
|
Send letter to all the shareholders at the latest
available address
|
31-07-2017
|
9
|
Simultaneously publish a notice in the leading newspaper
in English and regional language having wide circulation informing the
concerned that the names of such shareholders and their folio Number or DP ID
and Client Id are available on their website duly mentioning the website
address
|
Rule 6(3)(a)
|
Publish newspaper advertisements in English and regional
language
|
31-07-2017
|
10
|
Every company which has remitted the amount to the Fund
shall nominate a Nodal Officer for the purpose of coordination with the IEPF
authority and communicate the contact details of the Nodal Officer duly
indicating his or her designation, postal address, telephone and mobile
number and the company authorised email id to the IEPF authority, within 15
days from the date of publication of these rules and the company shall
display the name of the Nodal Officer and his email Id on its website.
|
Rule 7(2A)
|
Company to communicate the contact details of the Nodal
Officer duly indicating his or her designation, postal address, telephone and
mobile number and the company authorised email id to the IEPF authority,
within 15 days from the date of publication of these rules and the company
shall display the name of the Nodal Officer and his email Id on its website.
|
28-10-2017
|
Sl
No
|
Step
|
Regulatory
provision
|
Action
to be taken
|
Due
Date
|
FOR EFFECTING THE
TRANSFER OF SHARES HELD IN DEMAT FORM
|
||||
01
|
Company shall inform the depository by way of corporate
action, where the shareholders have their account for transfer in favour of
the authority
|
Rule 6(3)(c ) (i)
|
Company to prepare a list of shareholders containing the
details of Name of the shareholder, Demat Account No (DP Id, Client Id) and
number of shares held separately for CDSL and NSDL.
|
31-10-2017
|
02
|
Rule 6(3)(c ) (i)
|
Company to inform
CDSL and NSDL by way of corporate action requesting them
to transfer the shares to the demat account of IEPF authority
|
31-10-2017
|
|
03
|
Upon receipt of such intimation from the Company,
depository shall effect transfer of shares in favour of the Demat account of
the IEPF Authority
|
CDSL and NSDL to transfer the shares to the Demat account
of IEPF authority
|
01-11-2017 to
30-11-2017
|
|
SHARES HELD IN PHYSICAL
FORM
|
||||
04
|
Company Secretary or person authorised by the Board
to make an application, on behalf of the concerned shareholder, to the
Company, issue of new share certificate
|
Rule 6(3)(d)(i)
|
Company Secretary/ authorised Person to submit application
along with a list of shareholders containing details of name, Folio No, Share
Certificate No and number of shares held
|
01-11-2017
|
05
|
On receipt of application, Company to issue a new
share certificate for each such shareholder
|
Rule 6(3)(d)(ii)
|
State on the face of the new share certificate, “issued in
lieu of share certificate No ….. for the purpose of transfer to IEPF”
|
07-11-2017
|
06
|
Particulars of every share certificate issued as above
shall be recorded in the register maintained for the purpose
|
Rule 6(d)(iii)
|
Maintain the Register of share certificates issued
in Form No SH-02 for this purpose separately
|
07-11-2017
|
07
|
Company shall inform the depository by way of corporate
action to convert the share certificates into Demat form and transfer
in favour of the IEPF authority
|
Rule 6(d)(iv)
|
Company to inform CDSL or NSDL by w ay of
corporate action to convert the duplicate share certificates into Demat form
|
10-11-2017 to
30-11-17
|
08
|
Company shall make such transfers through corporate action
and shall preserve the copies for its records
|
Rule 6(4)
|
Company shall preserve the copies of
letters/corporate action forms and records of transfers
|
10-11-2017 to
30-11-2017
|
09
|
While effecting such transfer, the company shall send a
statement to the Authority in Form No IEPF-4 containing details of such
transfer
|
Rule 6(5)
|
Company to send the statement in Form
IEPF-4
|
30-11-2017
|
10
|
Company to file the details of shares which are not going
to be transferred to the IEPF due to the reason that there is specific
order of the court of Tribunal or statutory authority restraining any
transfer of shares and where such shares are pledged or hypothecated under
the provisions of Depositories Act, 1996
|
Proviso to Rule 6(3)(b)
|
File Form No IEPF-3
Within 30 days of the end of the Financial year
|
30-04-2018
|
GENERAL PROVISIONS
|
||||
11
|
Voting rights on the shares transferred to the IEPF shall remain
frozen until the rightful owner claims the shares
|
Rule 6(6)
|
||
12
|
Company shall maintain the details of shareholding of each
individual shareholders whose shares have been credited to the Demat account
of the IEPF
|
Rule 6(8)
|
||
13
|
All benefits accruing on such shares e.g. bonus shares,
split, consolidation, fraction shares etc, except right shares shall also be
credited to such Demat account
|
Rule 6(9)
|
||
14
|
Any further dividend on such shares shall be credited to
the Fund and a separate ledger account shall be maintained for such proceeds
|
Rule 6(12)
|
||
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Ravi Garg
(Company Secretary)
thanks for sharing the detailed view...really helpful
ReplyDeletePlease confirm if Company does not declare dividend in 2011 to 2017, then also the provisions will be applicable?
ReplyDeleteIf there is unpaid dividend still lies for 7 yrs, then shares will also be transferred.
DeleteTherefore if due date of transfer of Dividends falls during the 7 Sept, 16 to 31 Oct, 17 then shares are liable to be transfer.
For procedure go through http://csravi2014.blogspot.in/2017/03/iepf-amended-rules-2017.html
One more thing, if shares converted onto Demat during the period, then also share will be transferred?
DeleteSee this is call of Company, how they consider such cases.\
DeleteTwo Views:
1. Person remains the same with same PAN, so liable if dividend is pending.
2. Being Demated share, shareholder is deemed to be active and created a different folio as per Shareholding pattern, hence not liable
Thanks
DeleteI had one more query,
ReplyDeleteIf sharholding of person in 2009 is 100 and on this dividends are pending. Further in 2016 sharholding became 250. Then how much shares will be transferred?
100 Shares...On which dividends are still unpaid
ReplyDeleteQuery of Many Corporate Members:
ReplyDeleteQ. Can the shareholders be intimated only once each year about their shares which are due to be transferred to IEPF irrespective of number of dividends declared during the year?
Ans. The Company is required to intimate and inform the respective shareholders about the fact of transferring their unclaimed shares in compliance with rule 6 (3) (a) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules, 2016’).
Rule 6 (3) (a) states, “ the company shall inform at the latest available address, the shareholder concerned regarding the transfer of shares three months before the due date of transfer of shares xxx’.
Looking at the language of the aforesaid provisions, it is clear that on the expiry 6 years and 9 months from the transfer of such dividend to unpaid dividend account, a company shall inform their shareholders regarding proposed transfer to IEPF. Thereafter, on completion of 3 months of such intimation the Company shall transfer such shares to IEPF.
Considering a situation where a company has declared both interim dividend and final dividend, then in such cases the due dates for transfer of unpaid and unclaimed dividend and the underlying shares to IEPF will be different and will be based on the date of declaration of such dividends.
The period of 6 years and 9 months for the purpose of informing shareholders will be different. Therefore, in such case intimating the shareholder once in a year will not suffice the purpose of rule 6 (3).