Amid stakeholder concerns, the government has decided to revise certain rules regarding Investor Education and Protection Fund (IEPF), including those related to transfer of shares.
Citing practical difficulties, many companies had approached the Corporate Affairs Ministry seeking clarity and possible relaxations with respect to certain aspects of the IEPF (Accounting, Audit, Transfer and Refund) Rules 2016.
Among others, the issues pertained to transfer of physical shares, levy of stamp duty and requirement to make public details of shareholders in the context of unclaimed dividend amount.
Against this backdrop, the ministry has decided to make changes in the existing norms.
According to the ministry, various representations have been received seeking simplification of transfer process of shares under IEPF apart from requests for extending the due date prescribed for transferring the shares.
"The matters, including simplification of transfer process and extension of date for such transfer, are under consideration and the rules are likely to be revised. The revised rules shall be notified in due course," the ministry said in a circular on Wednesday.
A set of norms pertaining to IEPF are effective from September 7 onwards.
IEPF can be utilised for refund in respect of unclaimed dividends, matured deposits and matured debentures, among others.
Some companies that have approached the ministry have contended that implementation of the rules in the current firm might not be "practically feasible".
One of suggestions was that share transfer related rules need to be revisited and relaxations be made in terms of compliance requirements till the revised ones are in place.
Sources had said a major operational impediment being seen by companies is in transfer of shares kept in the physical form to the IEPF as there are a lot of procedural requirements to be followed when such shares are transferred.
For the purpose of transferring shares held in physical form to IEPF, companies are required to issue duplicate shares, in lieu of current valid shares.
With respect to issuance of duplicate shares, many companies have elaborate procedures laid out in their Articles of Association.
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