MCA amends IEPF (Accounting, Audit, Transfer and Refund) Rules: Term ‘Shares’ Now Substituted with ‘Securities’ [Read Notification]

The Ministry of Corporate Affairs ( MCA ) has amended the Investor Education and Protection Fund ( IEPF ) Authority (Accounting, Audit, Transfer, and Refund) Rules, 2016, by substituting the term “shares” with “securities” across various provisions.

This amendment, effective from the date of its publication in the Official Gazette, introduces significant changes to the process of handling claims related to securities and strengthens the regulatory framework surrounding the transmission and refund of unclaimed investor funds.

The key change in the amendment involves replacing the word “shares” with “securities” throughout Schedule II and Schedule III of the IEPF Rules. This broader term reflects a more inclusive approach, encompassing all forms of securities rather than just shares, and aligns the rules with modern financial practices.

Additionally, the amendment includes provisions for the transmission of securities. It introduces the option of submitting a legal heir certificate issued by a revenue authority (not below the rank of Tahsildar) in lieu of a tribunal order for transferring securities in the event of the holder’s death.

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The amendment also clarified that, in cases where a will is submitted, the claimant must provide a notarized indemnity bond. Similarly, if a legal heir certificate is used, it must be accompanied by a no-objection certificate from all other heirs. The value of the securities will be determined based on the closing price on a recognized stock exchange or the face/maturity value, whichever is higher.

The amendments also address the procedures for foreign nationals or non-resident Indians (NRIs), allowing them to submit self-declarations for lost, misplaced, or stolen securities, along with notarized or apostilled documents from their country of residence.

In another important change, the amendment raises the monetary threshold from ₹5 lakh to ₹15 lakh for securities-related claims. Furthermore, the amendment mandates companies to take contingency insurance policies to cover potential risks arising from claims related to unclaimed securities.

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