A Detailed Guide on Investor Education & Provident Fund (IEPF)

Last Updated On: Feb. 8, 2022, 12:30 p.m.
...

A DETAILED GUIDE ON INVESTOR EDUCATION & PROTECTION FUND (IEPF)

INTRODUCTION:

According to the section 205C of the Comapnies Act, 1956 Investor Education and Protection Fund or IEPF was initially a fund set up. It is now set up under  Section 125 of the Companies Act, 2013. 

It is a fund set up to pool in all the dividends of the Asset Management Companies, matured deposits, share application interests or money, debentures, interests, etc. that are unclaimed for seven years. All the money collected from these sources has to be transferred to IEPF. Investors, who are trying to seek a refund for their unclaimed rewards can now do so from the Investor Protection and Education Fund (IEPF). 

 

What is the purpose of introducing IEPF?

Initially it was introduced with the idea of using investor's money for their benefits such as investor’s education, investor’s awareness programme. Later in the year 2016, the government made it mandatory the transfer of underlying shares on which dividends had not been claimed for the last seven consecutive years. This gave rise to ambiguities with respect to the process of transferring the same to the government and certain other confusions among all the stakeholders.

This was later amended by the Ministry of Corporate Affairs(MCA) dated 14th August 2019 through which the process has become simplified.

 

 

SECTION 125 INVESTOR EDUCATION & PROTECTION FUND:

The Central Government shall establish a fund to be called as Investor Education & Protection Fund
 

I.Under section 125(3) the funds can be utilized for the following:

The refund of unclaimed dividends, matured deposits, matured debentures, the application money due for refund & interest thereon;

  1. promotion of investors’ education, awareness and protection;
  2. Distribution of any disgorged amount among eligible and identifiable applicants for shares or debentures, shareholders, debenture-holders or depositors who have suffered losses due to wrong actions by any person, in accordance with the orders made by the Court which had ordered disgorgement
  3. Reimbursement of legal expenses incurred in pursuing class action suits u/s 37 and 245 by members, debenture-holders or depositors as may be sanctioned by the Tribunal; and
  4. Any other purpose incidental thereto, in accordance with such rules as may be prescribed

 

II.Under section 125(2) amount to be credited to the fund for the following:

Donations or grants given by Central Government

  • Amount in Unpaid Dividend Account of the company
  • the interest or other income received out of investments made from the Fund
  • application money received for allotment and due for refund
  • Matured Deposits or Debentures
  • Any interest on the points D, E and F
  1. Sales proceeds of fractional shares arising out of issuance of bonus shares, merger & amalgamation for 7 or more years
  2. redemption amount of preference shares remaining unpaid or unclaimed for 7 or more years
  3. all shares as well as the resultant benefits on such shares

 

What is 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 IEPF authority set up by MCA that shall further process the application. Details process we will discuss in next steps in the editorial.
 

 

 

HOW TO FILL E-FORM IEPF?

STEP I: COLLECTION OF INFORMATION FOR FILING OF E-FORM:

i. Details of the Claimant

  • Name
  • Father Name
  • Date of Birth

ii. Mobile No & Email Id Make sure you are using such Mobile No and email ID. Because you will get OTP on mobile and email id for verification of the same.

 OTP are required to mentioned in e-form IEPF5 and click on verify OTP.

iii. Aadhar and PAN No.

Keep copy of Aadhar and PAN with you for mentioning such information in the form.

iv. Details of share to be claim:

  • Folio No/ Demat No
  • Type of Shares
  • Number of Shares

v. Details of Dividend to be claim:

  • Number of Claims
  • Folio No/ Demat No.
  • Amount of Claim
  • Financial year to which claim relates
  • Reason for non receipt

vi. Details of Bank Account in which you want to claim refund.

vii. Details of Demat Account in which share shall be credited. Note: A person should keep above mentioned information ready with him. If he wants to claim shares/ dividend from IEPF.

 

STEP II: ARRANMENT OF DOCUMENTS FOR FILING OF FORM:

Before filing of form with MCA. A person should keep following documents hard copy as well as scan copy ready with himself.

i. KYC Documents:

  • Self-attested copy of PAN
  • Self-Attested copy of Aadhar Card

ii. Original Share Certificates

iii. Original Cancelled Cheque

iv. In case share was in Demat.

Then copy of Demat account showing the debit of shares to IEPF. Such statement should be signed by applicant and depository participant

v. Indemnity Bond: Prepare one Indemnity Bond

In case claim of shares and dividend both, non-judicial stamp paper of appropriate value as prescribed under Stamp Act according to statement In case of only dividend, if dividend amount is less than Rs. 10,000 indemnity bond can be executed on a plain paper.

 

STEP III: PREPARATION OF E-FORM IEPF-5: 

After collection of above-mentioned information/ documents person have to file the form with MCA i.e. IEPF-5.

i. Create Log in on MCA Website

ii. Click on IEPF.gov.in

iii. Click on Web IEPF-5

iv. Fill the information there v. Attached documents (as mentioned above)

vi. and submit the same.

 

STEP IV: Submission of Documents with Nodal Officer: 

After submission of IEPF-5. Claimant have to do the following things:

i. Take Print out of the IEPF-5

ii. Take Print out of Acknowledgement of IEPF—5 Courier all the above-mentioned documents along with these two documents to Nodal Officer of the Company. Details of Nodal Officers are available on website of the Company.

 

ABOUT LEGAL SUVIDHA

Copyright © 2013-2021 - All Right Reserved