NODAL OFFICER


Originally, neither the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 nor the Companies Act, 2013 have any mention of Nodal Officer except Form IEPF – 5. The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2017 first time bring this term in main rules. Now the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2019 strengthen and formalized the office of Nodal Officer. New Provision came into effect with effect from 20th August 2019.

ORIGIN

The Form IEPF – 5 since beginning suggests that the form should be forwarded to the Nodal Officer (IEPF) of the company. Later a government advertisement DAPV/07101/11/0051/1617 was published in this regard in newspapers and government site here. A mail from MCA to companies also asked for information of the Nodal Officer.

FIRST FORMAL RECOGNITION

With Second Amendment Rules of 2017, the officer of the Nodal Officer got a formal legal backing. Original Rule 7(2A) asked companies to communicate (by mail) details of the Nodal Officer to IEPF within fifteen days from the date of publication of those rules. Details of the Nodal Officer were and are still also required to be placed on the website of the company. However, role of the Nodal Officer was not defined in law but only Form IEPF – 5 make him a focal point of communication between claimant, company and the IEPFA. We briefly discussed it earlier here.

REQUIREMENT AND QUALIFICATION

Now, Rules 7(2A) and 7(2B) along with other rules makes the Nodal Officer more formal with legal qualification, duties, responsibilities and consequences.

Every company which is required to credit amounts or shares to the fund or has deposited the amount or transferred the shares to the Fund shall nominate a Nodal Officer.

The Nodal Officer shall either be a Director or Chief financial Officer or Company Secretary of the company.

He shall be appointed for the purposes of verification of claims and coordination with Investor Education and Protection Fund Authority. [Sub – rule (2A) of Rule 7]

In case a company fails to appoint Nodal Officer, every director of the company shall be deemed to be nodal officer and be liable for any failure to comply with requirement of these rules. [Third Proviso to Sub – rule (2A) of Rule 7]

Deputy Nodal Officer

A company may appoint one or more Officer as Deputy Nodal Officer to assist the Nodal Officer for the purposes of verification of claim and for coordination with Investor Education and Protection Fund Authority. The Nodal Officer shall be solely liable for all actions of any officer appointed as Deputy Nodal Officer. [First and Second Proviso to Sub – rule (2A) of Rule 7]

The form permits up to 5 deputy nodal officer in a company. There is no designation prescribed for the position of Deputy Nodal Officer.

RETURN OF APPOINTMENT OF NODAL OFFICER

The following details of the Nodal Officer and Deputy Nodal Officer shall be communicated to the Investor Education and Protection Fund Authority:

  1. his or her designation,
  2. postal address,
  3. telephone and mobile number; and
  4. company authorized e-mail ID.

First reporting

In case of existing Nodal Officer, these details of the Nodal Officer or Deputy Nodal Officer shall be communicated in Form No. IEPF – 2 within fifteen days from the date of publication of these rules means on or before 4th day of September 2019. The company shall display the name of Nodal Officer and his e-mail ID on its website. [Sub – rule (2B) of rule 7]

Further or Fresh Reporting

Any change in the Nodal Officer or his details shall be communicated to the Authority through Form No IEPF-2 within seven days of such change along with board resolution thereof.

GLIMPSE OF IMPORTANCE OF THE NODAL OFFICER

Upon submission, Form IEPF-5 shall be transmitted online to the Nodal Officer of the company for verification of claim. [Sub – rule (2) of Rule 7]

The claimant shall submit in original all these documents duly signed by him, to the Nodal Officer of the concerned company. [Second Proviso to sub – rule (8) of Rule 7]

The company shall send verification report only to the Authority and shall attach the scanned copy of all the original documents submitted by the claimant in physical form duly certified by its Nodal Officer. [Sub – rule (3) of Rule 7]

For failure to submit verification report of the claim in accordance with these rules, the company and its Nodal Officer shall be punishable as per the provisions of the Act. [Fourth Proviso to sub – rule (3) of Rule 7]

FORM IEPF – 2 (NODAL OFFICER)

The Form IEPF – 2 may be filed for following purpose:

  • Statement of unclaimed and unpaid amounts,
  • Appointment of Nodal Officer,
  • Appointment of Deputy Nodal Officer,
  • Updation of details of Nodal Officer only, and
  • Updation/Cessation of details of Deputy Nodal Officer only

 For filing the Form we required PAN, Board Resolution, official landline and mobile numbers and email address.

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