The Ministry of Corporate Affairs (“MCA”) has issued Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2024 to amend Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“Principal rules”).

Key highlight of the Amendment is mentioned below:

Under Schedule II

1. Documents required to be submitted at the time of transmission of securities held in physical or demat mode will include following documents in addition to the existing list of documents:

1. 1. Legal heir certificate issued by the revenue authority not below the rank of Tahsildar having jurisdiction.
   2. In case Will is submitted as a document, the same shall be accompanied with a notarised indemnity bond from the claimant to whom the securities are transmitted.
   3. In cases where a copy of legal heir certificate issued by the revenue authority not below the rank of Tahsildar having jurisdiction is submitted at the time of transmission of securities, the same shall be accompanied with–
      1. a notarised indemnity bond from the legal heir or claimant to whom the securities are transmitted; and
      2. a no objection certificate from all legal heirs other than claimants, stating that they have relinquished their rights to the claim for transmission of securities, duly attested by a notary public or by a gazetted officer.
2. Following explanation inserted under Part A & B: The value of the securities as on the date of application shall be quantified by the applicant on the basis of the closing price of such securities at any one of the recognised stock exchange a day prior to the date of such submission in the application, for listed securities and for unlisted securities, the value shall be quantified basis on the face value or the maturity value of the security, whichever is more.
3. Under Part B the value of securities per issuer company as on the date of application will be Rs. 15,00,000/- instead of Rs. 5,00,000/-

Under Schedule III:

1. Self-attested copy of FIR/ Police Compliant containing information of security holder, holding details, folio number and distinctive numbers of share certificate are required to be submitted to the Authority in case of loss of securities held in physical mode if the market value of the shares is greater than five lakh rupees.
2. Requirement of Surety Affidavit has been done away with.
3. Copy of advertisement regarding loss of securities issued in a widely circulated newspaper will be required, instead 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.
4. Following explanation inserted:
   1. Foreign National or NRI are permitted to provide self-declaration of securities lost or misplaced or stolen which shall be duly notarised or apostilled or consularised in their country of residence, along with self-attested copies of valid passport and overseas address proof.
   2. The value of the securities as on the date of application shall be quantified by the applicant based on the closing price of such securities at any one of the recognised stock exchange a day prior to the date of such submission in the application, for listed securities and for unlisted securities, the value shall be quantified basis on the face value or the maturity value of the security, whichever is more.

Under Schedule IV:

New provision inserted wherein the companies shall take special contingency insurance policy from the insurance company towards the risk arising out of claim in respect of verification report or the revised verification report as the case may be.

Source: E Gazette (Ministry of Corporate Affairs)

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