The Ministry of Corporate Affairs (MCA) has issued General Circular No-07/2024 dated July 17, 2024, announcing significant changes to the compliance framework for the Investor Education and Protection Fund (IEPF). These updates include the merger of Forms IEPF-3 with IEPF-4 and IEPF-7 with IEPF-1, as well as revisions to the payment process within the MCA Version 3 system. This move aims to streamline compliance procedures and reduce the burden on stakeholders.
Merger of IEPF Forms
Pursuant to sub-rule (10), (11), (11A) & sub-rule (12) of rule 6 and sub-rule (9), (10) & (11) of rule 6A of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, various amounts need to be transferred to the IEPF Authority. These amounts are related to shares transferred by companies under sub-section (6) of section 124 of the Companies Act, 2013. Previously, these transfers required the filing of Form No IEPF-7 under sub-rule (13) & (13A) of rule 6 and sub-rule (12) of rule 6A.
For shares and unpaid dividends not transferred to the Authority, companies were required to file Form No IEPF-3 under the proviso to sub-rule (3(B)) of rule 6 of the IEPF Authority Rules.
To ease the compliance burden and simplify filings, the MCA has decided to merge Form IEPF-3 with Form IEPF-4 and Form IEPF-7 with Form IEPF-1 in MCA Version 3. The revised forms will now be processed through the Straight Through Process (STP) system, making compliance more efficient and less time-consuming for companies.
Changes to Payment Process
In addition to the form mergers, the MCA has introduced significant changes to the payment process for amounts due to the IEPF Authority. According to the new circular, the amounts required to be transferred under the provisions mentioned in para 1 of the circular will now be transferred online through the MCA 21 system. This will be done using the “Pay Miscellaneous Fee” service after selecting the “Investor Education and Protection Fund” option. This change aims to enhance the transparency and efficiency of the payment process.
Supersession of Previous Circular
This new circular supersedes General Circular No. 12/2017. Stakeholders are advised to plan accordingly to adapt to these changes and ensure compliance with the new requirements.
Additional Fee Waiver
In a related update, the MCA issued Circular No. 6/2024 on July 16, 2024, which provides a transition period for stakeholders moving from MCA 21 v2 to MCA 21 v3. To facilitate this transition and provide an opportunity for compliance, the MCA has waived the additional fee on filing various IEPF e-forms and e-verification of claims filed in e-form IEPF-5 until August 16, 2024. This waiver aims to ease the compliance process for companies and ensure a smooth transition to the updated system.
These updates by the MCA are a significant step towards simplifying the compliance process for companies dealing with IEPF-related filings. By merging forms and streamlining the payment process, the MCA aims to reduce the compliance burden on companies and improve the overall efficiency of the system. Stakeholders are encouraged to take note of these changes and update their compliance procedures accordingly.
For more detailed information, stakeholders can refer to General Circular No-07/2024 and Circular No. 5/2024 available on the MCA website.
Important Points to Note:
- Forms Merged: IEPF-3 with IEPF-4, and IEPF-7 with IEPF-1.
- New Payment Process: Online through MCA 21 using the “Pay Miscellaneous Fee” service.
- STP System: Revised forms will be processed through the Straight Through Process system.
- Fee Waiver: Additional fee on filing various IEPF e-forms and e-verification of claims in e-form IEPF-5 waived until August 16, 2024.
These changes reflect the MCA’s ongoing efforts to enhance regulatory compliance and ease of doing business in India.
Visit www.cagurujiclasses.com for practical courses
