CLARIFICATION REGARDING TRANSMISSION OF SECURITIES BY OPERATION OF LAW

posted by: corporate

The Ministry of Corporate Affairs has issued Circular No. 07 dated 5th June, 2017 to All Stakeholders, Nodal Officers (IEPF) of Concerned Companies, All Regional Directors and Registrar of Companies providing Clarification regarding Transmission of securities by Operation of Law.

Clarity has been sought by the stakeholders w.r.t Issue of duplicate shares under Rule 6(3)(d) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. It has been stated that since transfer of shares to IEPF under Section 124 (6) of Companies Act, 2013 read with rules referred to above takes place on account of operation of law hence the procedure followed during transmission of shares may be followed in such cases and duplicate shares need not be issued in such cases. The suggestions made by the stakeholders has been examined in the Ministry and and it is clarified that the procedure similar to what is followed in case of Transmission of Shares may be followed by companies while transferring shares to IEPF Authority pursuant to Section 124(6) read with applicable rules.

This issues with the Approval of Competent Authority.