pri Trade/Sale/Purchase of Securities by Trusts of EPF Exempted Establishments – Reg. Trade/Sale/Purchase of Securities by Trusts of EPF Exempted Establishments – Reg.

Employees’ Provident Fund Organisation
(Ministry of Labour, Govt. Of India)
BhavishyaNidhiBhawan, 14- BhikajiCama Place, New Delhi — 110066,

No. C-Ex/Ex – Return/ 2013/Vol. II/3990

Date: 25 May 2018


All Addl. Central P.F. Commissioner (Zones),

All Regional P.F. Commissioner/OIC of Regional Offices,

Subject : Clarification regarding Trade/Sale/Purchase of Securities by the Trusts of EPF Exempted Establishments – Regarding.


Please refer to the subject cited above.

2. Ministry of Labour & Employment vide notification No. S.O. 1433(E) dated 29.05.2015 (hereinafter referred as notification) had prescribed the pattern of investment which is required to be followed by the Trusts of establishments exempted from the operation of EPF Scheme, 1952. Para 4 of the said notification states as under –

“Proceeds arising out of exercise of put option, tenure or asset switch or trade of any asset before maturity can be invested in any of the permissible categories described above…”

Para 5 of the said notification states as under –

“Turn over ratio (the value of securities traded in the year/average value of the portfolio at the beginning of the year and at the end of the year) should not exceed two.”

3. Further, condition No. 20of Appendix – ‘A’ to Para 27AA of the EPF Scheme, 1952 stipulates the following :-

“The exempted establishment shall intimate to the RPFC concerned the details of depository participants (approved by the Reserve Bank of India and Central Government), with whom and in whose safe custody, the investments made in the name of trust, viz., Investments made in securities, bonds, etc. have been lodged. However, the Board of Trustees may raise such sum or sums of money as may be required for meeting obligatory expenses such as settlement of claims, grant of advances as per rules and transfer of member’s P.F. accumulations in the events of his/her leaving service of the employer and any other receipts by sale of the securities or other investments standing in the name of the Fund subject to the prior approval of the Regional Provident Fund Commissioner”

4. Para 4 and 5 allows the Trusts of the exempted establishments to invest/re-invest the funds received through maturity proceeds, asset switch or trade of any asset before maturity etc. subject to conditions laid under Para 4 and 5 of the notification. Whereas, condition no. 20 of Appendix – ‘A’ to Para 27AA of the EPF Scheme, 1952 prescribes for prior approval of Regional P.F. Commissioner for selling of the securities for meeting obligatory expenses such as settlement of claims and grant of advances etc. It is therefore clarified that the Trust of exempted establishment are required to obtain the prior permission of Regional P.F. Commissioner for selling of securities if and only if the Trusts have to utilize the amount obtain4 through sale of securities for meeting the obligatory expenses arising out of any of the reasons mentioned in condition no. 20 itself. Nothing will restrain the Trusts of exempted establishments for trade of securities unless they are in compliance with the instructions contained in the notification.

5. Further, condition nos. 6 and 28 of Appendix ‘A’ to Para 27AA of EPF Scheme, 1952 shall be applicable even in cases where there is any loss while operating Para 5 of the notification.

[This issues with the approval of CPFC]

Yours faithfully

(Sushi) Kumar L hani)

Addl. Central P.F. Commissioner (HQ)

Copy to : i) Deputy Director, Rajbhasha…. For Hindi version please.

ii) Guard file….for records.

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