All about Investor Education and Protection Fund - Must Read

5956 views

Save Share

Guest

Act

Section 205C (Establishment of Investor Education and Protection Fund)

(1)

The Central Government shall establish a fund to be called the Investor Education and Protection Fund (hereafter in this section referred to as the “Fund”).

(2)

There shall be credited to the Fund the following amounts, namely:-

(a)

amounts in the unpaid dividend accounts of companies;

(b)

the application moneys received by companies for allotment of any securities and due for refund;

(c)

matured deposits with companies;

(d)

matured debentures with companies;

(e)

the interest accrued on the amounts referred to in clauses (a) to (d);

(f)

grants and donations given to the Fund by the Central Government, State Governments, companies or any other institutions for the purposes of the Fund;and

(g)

the interest or other income received out of the investments made from the Fund;

Provided that no such amounts referred to in clauses (a) to (d) shall form part of the Fund unless such amounts have remained unclaimed and unpaid for a period of seven years from the date they became due for payment.

Explanation:- For the removal of doubts, it is hereby declared that no claims shall lie against the Fund or the company in respect of individual amounts which were unclaimed and unpaid for a period of seven years from the dates that they first became due for payment and no payment shall be made in respect of any such claims.

(3)

The Fund shall be utilized for promotion of investors’ awareness and protection of the interests of investors in accordance with such rules as may be prescribed.

(4)

The Central Government shall, by notification in the Official Gazette, specify an authority or committee, with such members as the Central Government may appoint, to administer the Fund, and maintain separate accounts and other relevant records in relation to the Fund in such form as may be prescribed in consultation with the Comptroller and Auditor-General of India.

(5)

It shall be competent for the authority or Committee appointed under sub-section (4) to spend moneys out of the Fund for carrying out the objects for which the Fund has been established.

Rules

The Gazette of India
Extraordinary
Part-II Section3(i)
MINISTRY OF LAW JUSTICE AND COMPANY AFFAIRS
(Department of Company Affairs)
NOTIFICATION
New Delhi, the 1st October, 2001

GSR 750(E)In exercise of the powers conferred by clauses (a) and (b) of sub-section (1) of section 642 of the Companies Act, 1956 (1 of 1956), read with sub-section (3) of section 205C of that Act, the Central Government hereby makes the following rules, namely: -

1. Commencement:

1. (1)

These rules may be called the Investor Education and Protection Fund (awareness and protection of investors) Rules, 2001.

(2)

They shall come into force on the date of their publication, in the Official Gazette.

2. Definitions:

In these rules, unless the context otherwise requires:-

‘Act’ means the Companies Act, 1956;

‘Fund’ means the Investor Education and Protection Fund (IEPF) established under sub-section (1) of 205C of the Act, 1956 (1 of 1956);

“Ministry” or “Department” means Ministry or Department of the Central Government dealing the Company Affairs;

‘Committee’/’Sub Committee’ means the Committee specified by Central Government under sub-section (4) of section 205C of the Act to administer the Fund.

‘Form’ means forms prescribed by these rules;

Words and expressions used in these rules and not defined herein but defined in the Act shall have the meaning respectively assigned to them in the Act.

3. Credits to the Fund

(i)

Any amount required to be credited by the companies to the Fund, as provided in the Act shall be remitted into the concerned specified branches of Punjab National Bank, within a period of thirty days of such amounts becoming due to be credited to the Fund and the amount so credited shall be accounted for as provided in Rule 4.

(ii)

The amount shall be tendered by the companies on behalf of the Central Government in such branches of Punjab National Bank along with Challan (in triplicate) and the Bank will return two copies duly stamped to the Company as token of having received the amount.

Every Company shall file with the concerned Registrar of Companies one copy of the Challan referred to in (a) evidencing deposit of the amount to the Fund.The Company shall fill in the full descripttion and the nature of the amount tendered and its Head of Account.

(i)

Every Company shall, when effecting a credit to the account of the Fund, will separately furnish to the concerned Registrar of Companies a statement in Form duly certified by a Chartered Accountant or a Company Secretary or a Cost Accountant practicing in India or by the statutory auditors of the company.Provided that each Company shall keep a record relating to folio number, Certificate Number etc. in respect of persons to whom the amount of unpaid or unclaimed dividend, application money, matured deposit or debentures, interest accrued or payable, for a period of three years and the Committee or Sub-Committee shall have powers to inspect such records of that period.

(ii)

On receipt of this statement, the concerned Registrar of Companies shall enter the details of such receipt in a register and reconcile the amount so remitted and collected, with the concerned Pay and Accounts Officer, on monthly basis.

(iii)

Each Registrar of Companies shall furnish an abstract of such receipt received during the month to Department of Company Affairs within seven days from the close of the month.

(iv)

Department of Company Affairs shall maintain a consolidated abstract of receipts and shall reconcile them on a quarterly basis with Principal Pay and Accounts Office of the Department of Company Affairs.

4. Manner of Accounting:

(i) (A)

All amounts received shall be accounted for under the following Heads of account, which shall thereafter be transferred to the Fund.

MAJOR HEAD 0075 – Miscellaneous General Services.

Major Head 104 – Unclaimed and Unpaid dividends, deposits and debentures etc. of Investors in companies:

(a)	Unpaid dividend.
(b)	Unpaid application money received by Companies for allotment of securities and due for refund.
(c)	Unpaid Matured Deposit.
(d)	Unpaid Matured Debentures.
(e)	Interest accrued on (a) to (d).

(i)

Interest on unpaid dividend.

(ii)

Interest on unpaid application money received by Companies for allotment of securities and due for refund.

(iii)

Interest on unpaid matured deposit.

(iv)

Interest on unpaid matured debentures.

Note: (a) to (d) shall be sub-heads, (e) (i) to (iv) shall be detailed heads.

(i)

(B) Grants and donations given to the Fund by the State Governments, Companies or any other Institutions will be credited under the Sub-Head under the Minor Head ‘800-Other Receipts below the Major Head ’0075- Miscellaneous General Services

(ii)

All expenditure for the purposes of carrying out the objects for which the Fund has been established shall be incurred under the functional Head expenditure head of Department of Company Affairs and equivalent amount will be shown as deduct entry by transfer of amount from the Fund.

(iii)

Surplus amount, if any, from the fund accounts shall not, for the present, be utilized for investment purpose.

5. Expenses of the Committee:

(a)

The official member of the committee or sub-committee shall be entitled to Traveling Allowance according to the rules regulating their official position.

(b)

For Journeys performed by a non-official member of the Committee or Sub-Committee or a special invitee in connection with the work of the committee or a sub-committee shall be entitled for TA/DA as per supplementary Rules of Central Government.

(c)

Committee shall have powers to recommend appointment /remuneration to any experts in such areas as may be considered necessary.

(d)

Committee shall have powers to recommend appointment of Auditors and for scrutinizing the accounts of the voluntarily agencies registered with it.

6. Audit of Accounts:

The accounts of the Fund shall be audited by internal audit party of the Department of Company Affairs every year and will also be subject to audit by the office of Comptroller and Auditor General of India.

7. Constitution and Functions of the Committee:

(a)

The Committee shall consist of ten members, excluding the Chairperson who is Secretary, to the Department of Company Affairs. The members shall be nominated by Reserve Bank of India, the Securities and Exchange Board of India and or from any other Ministry or Department of Central Government dealing with investor protection activities and experts from the field of investors’ education and protection. The non-official Members shall hold office for a period of two years. The Official members shall hold office for a period of two years or until they occupy their position which ever is earlier. The constitution of the Committee shall be notified in the Official Gazette.

(b)

Functions of the Committee:

(I)

The Committee shall recommend the following activities relating to investors’ education, awareness and protection:

(a)

Education Programmes through Media;

(b)

Organizing Seminars and Symposia;

(c)

Proposals for registration of Voluntary Associations or Institution or other Organizations engaged in Investor Education and Protection activities;

(d)

Proposals for projects for Investors’ Education and Protection including research activities and proposals for financing such projects;

(e)

Coordinating with institutions engaged in Investor Education, awareness and protection activities;

(f)

(i)	The Committee may appoint one or more sub-Committees whenever it considers necessary to facilitate efficient and speedy discharge of its functions.
(ii)	Sub-Committee shall be constituted from amongst the members.
(iii)	The Chairperson of the Committee may nominate any one of the members of the Sub-Committee as its convenor and where no such nomination has been made, the members of the Sub-Committee elect a convenor amongst themselves.
(iv)	The Committee may have Sub-Committee to examine the end use of grants and assistance and recommend release of funds.

8. Power to call upon a Company:

(i)

The Committee shall have suo moto powers to call upon any company to pay the amount due to the Fund.

(ii)

Committee shall call upon any company to give estimates of the amounts to be credited to the Fund in form 2.

9. Report by the Committee:

The Committee shall furnish its activity report for every six month’s period to the Central Government.

10. Meetings:

(i)

One third of the total members subject to five members in the case of meeting of committee and three members in case of sub-committee meeting shall constitute a quorum.

(ii)

The Chairperson of the Committee and the convenor of a Sub-Committee, respectively, shall preside over the meetings of the Committee or the Sub-Committee as the case may be. In the event of the Chairperson or, as the case may be, the convenor being unable to attend the meeting for any reason, the members present may elect one amongst themselves to preside over the meeting.

(iii)

The Chairperson of the Committee or the convenor of a sub-Committee may, call meeting of the Committee or a Sub-Committee:

Provided that the Chairperson or the Convenor, as the case may be, shall also call a meeting if a requisition for that purpose is presented to him by at least five members in the case of the Committee and three members in the case of a Sub-Committee.

(iv)

At least fourteen clear days’ notice indicating the time and place of the meeting shall be sent to the members of the Committee or the Sub-committee as the case may be:

Provided that in case of urgency, a special meeting of the Committee or Sub-Committee may be called at any time by the Chairperson or the convenor, who shall inform the members at least three clear days in advance of the subject matter for consideration at the meeting and the reasons for which he considers the meeting urgent;
Provided further that no other business shall be transacted at such a meeting.

(v)

The Chairman or the convenor, as the case may be, may invite any person to attend any meeting of the Committee or Sub-Committee as a special invitee but such person shall not be entitled to vote.

11. Agenda:

(i)

At least seven clear days before any meeting of the Committee or a Sub-Committee, except meeting referred to in provisio to sub-rule (iv) to rule 10, a list of business proposed to be transacted at the meeting shall be sent to the members of the Committee or of a Sub-Committee, as the case may be.

(ii)

No business, not included in the list of business, shall be transacted at a meeting without the permission of the Chairperson presiding over the meeting.

12. Voting:

(i)

Every question brought before any meeting of the Committee or Sub-Committee, as the case may be, shall be decided by a majority vote of members present and voting at the meeting. No member shall vote by proxy.

(ii)

In the event of equality of votes, at a meeting, the Chairperson or the convenor, as the case may be or in his absence, the person presiding, shall have a second or casting vote.

13. Minutes:

The minutes of the meeting of the Committee or Sub-committee shall be caused to be recorded and circulated among the members.

14. Conditions for Utilization of Funds by the Committee:

(i)

The Committee may register from time to time various Associations or institutions or organizations, engaged in activities relating to investor awareness, education and protection and proposing for Investors programmes; organizing seminar, symposia and undertake projects for Investor Protection including research activities.

(ii)

Application for registration by such organisations referred to in sub-rule (i) be made in Form-3.

(iii)

Application for release of funds for the activities listed in Rule 7(1) from the organizations or Institutes registered with the Department of Company Affairs shall be made in Form 4.

(iv)

A copy of the summary or recommendations of the seminar or programme conducted and copy of Accounts for such activity by such organisation e.g., registered associations or chambers of commerce or institutes shall be provided to the Committee within ten days of the conclusion of the seminar or programme.

(v)

The organization or Associations registered shall be considered for grant of funds as a grant-in-aid either as one time measure or in stages or by way of reimbursement depending upon the nature of the activity proposed.

(vi)

The Committee shall be entitled to examine the end use of grants and assistance before recommending release of funds.

(vii)

The Committee shall cause to draw at the end of each Financial Year, a statement of Total Receipts from various sources indicated in section 205C of the Companies Act, 1956 and the grants disbursed or the expenditure incurred in connection with the activities organized by the Committee or Sub-Committee and other expenditure incurred for holding the meetings.

(viii)

The Committee shall maintain the necessary records showing amount disbursed, date of disbursal, the name of Organisation or Voluntary agency, the activities of the agency for which such disbursal was made.

Replies (6)

Guest

Posted on 08 March 2011

There is a Committee (commonly referred to as Main Committee or Apex Committee) to administer the IEPF. The Committee can appoint Sub - Committee to facilitate efficient and speedy discharge of its functions.

Brief of the Main Committee

Pursuant to Section 205C (4) read with Rule 7 of the IEPF Rules 2001, the Central Government has constituted a Committee vide Notification No. S.O. 539(E) dated 25.02.2009. The Secretary, Ministry of Corporate Affairs is the Chairman of the Committee. The members are representatives of Reserve Bank of India, Securities Exchange Board of India and experts from the field of investors’ education and protection. The non-official members of the Committee hold office for a period of two years. The official members hold office for a period of two years or until they occupy their position, whichever is earlier. The term of the present Committee is two years with effect from 25th February, 2009.

Previous Committees were constituted vide the following notifications:

(i)	S.O. 1280 (E) dated 28th December, 2001
(ii)	S.O. 125 (E) dated 28th January, 2004
(iii)	S.O. 368 (E) dated 21st March, 2006

Present Committee Notification - S.O. 539 (E) dated 25th February, 2009.

Functions

The Committee shall recommend the following activities relating to investors’ education, awareness and protection:

Education Programmes through Media;

Organizing Seminars and Symposia;

Proposals for registration of Voluntary Associations or Institution or other Organizations engaged in Investor Education and Protection activities;

Proposals for projects for Investors’ Education and Protection including research activities and proposals for financing such projects;

Coordinating with institutions engaged in Investor Education, awareness and protection activities;

The Committee may also be entrusted with such other functions for carrying out the objects for which the Fund has been established.

The Committee may appoint one or more Sub-Committees whenever it considers necessary to facilitate efficient and speedy discharge of its functions.

i.	Sub-Committee shall be constituted from amongst the members.
ii.	The Chairperson of the Committee may nominate any one of the members of the Sub-Committee as its convenor and where no such nomination has been made, the members of the Sub-Committee elect a convenor amongst themselves.
iii.	The Committee may have Sub-Committee to examine the end use of grants and assistance and recommend release of funds.

Guest

Posted on 08 March 2011

FREQUENTLY ASKED QUESTIONS ON IEPF

Who can apply for financial sanctions?
Any organization/Association/Society which fulfills the criteria/ guidelines for financial assistance under the IEPF can apply.

How to apply?
The organizations are required to submit their applications in Form 3 and Form 4.

What is IEPF?
Investor Education and Protection Fund (IEPF) has been established under Section 205C of the Companies Act, 1956 by way Companies (Amendment) Act, 1999 for promotion of investors’ awareness and protection of the interests of investors.

What activities are being undertaken by IEPF?
Investor Education and Protection Fund (awareness and protection of investors) Rules, 2001 stipulate the activities related to investors’ education, awareness and protection for which the financial sanction can be provided under IEPF.

(i) Activities stipulated under Rules
-	Education programme through Media
-	Organizing Seminars and Symposia
-	Proposals for registration of Voluntary Associations or Institution or other organizations engaged in Investor Education and Protection activities
-	Proposals for projects for Investors’ Education and Protection including research activities and proposals for financing such projects
-	Coordinating with institutions engaged in Investor Education, awareness and protection activities
(ii) Activities undertaken by IEPF till date
-	Educating and creating awareness among investors through Voluntary associations or organizations registered under IEPF. – 100 associations have been registered so far.
-	Educating investors through Media, Conducted panel discussions on DD (Delhi, Mumbai, Kolkata, Chennai and Ahmedabad), Telecast of TV Video spots on DD & private channels, print advertisement in national as well as regional newspapers. All these programmes have been undertaken in Hindi, English and regional languages.
-	Organizing seminars and workshops through associations registered under IEPF;
-	Financing research projects pertaining to investor education, awareness;
-	Coordinating with institutions engaged in investor education, awareness – Indian Institute of Capital Markets (IICM) has been engaged for conducting research/study on unclaimed dividend, interest etc. and also conducting “Training of Trainers” programme.

What is the procedure for Registration?
Any association or institutions or organizations, engaged in the activities relating to investors awareness, education and protection and proposing for investors programmes; organizing seminar; symposia and undertake projects for investor protection including research activities may register itself under Investor Education and Protection Fund. Such NGOs/Voluntary agencies which fulfill the criteria/guidelines for the purpose of financial assistance from the Investor Education and Protection Fund may apply to the IEPF for such assistance in Form 3 and Form 4.

What is procedure for crediting to IEPF?
(i)	Any amount required to be credited by the companies to the Fund, as provided in the Act shall be remitted into the concerned specified branches of Punjab National Bank, within a period of thirty days of such amounts becoming due to be credited to the Fund.
(ii)	(a)	The amount shall be tendered by the companies on behalf of the Central Government in authorized branches of Punjab National Bank along with challan (in triplicate) and the Bank will return two copies duly stamped to the Company as token of having received the amount.
	(b)	Every Company shall file with the concerned Registrar of Companies one copy of the challan referred to in (a) evidencing deposit of the amount to the Fund. The Company shall fill in the full descripttion and nature of the amount tendered and its Head of Account.
	(c)	Every Company shall, when effecting a credit to the account of the Fund, will separately furnish to the concerned Registrar of Companies a statement in Form 1 duly certified by a Chartered Accountant or a Company Secretary or a Cost Accountant practicing in India or by the statutory auditors of the company. However, it is mandatory that each Company keep a record relating to folio number, Certificate Number etc. in respect of persons to whom the amount of unpaid or unclaimed dividend, application money, matured deposit or debentures, interest accrued or was payable, for a period of three years and the Committee or Sub-Committee shall have powers to inspect such records of that period.
Which amounts are to be credited to IEPF? The following amounts that remained unpaid and unclaimed for a period of seven years from the date they became due for payment is credited to the fund:
(i)	amounts in the unpaid dividend accounts of the companies;
(ii)	the application moneys received by companies for allotment of any securities and due for refund;
(iii)	matured deposits with companies;
(iv)	matured debentures with companies;
(v)	the interest accrued on the amounts referred to in clauses (i) to (iv);
(vi)	grants and donations given to the fund by the Central Government, State Governments, companies or any other institutions for the purposes of the fund; and
(vii)	the interest or other income received out of the investments made from the fund.
What are the criteria for the purpose of financial assistance from the IEPF? Criteria/guidelines for the purpose of financial assistance from the Investor Education and Protection Fund are as follows:
(i)	Any organization/entity who has a viable project proposal on investors education and protection should be eligible for assistance from the Fund
(ii)	The limit for each person/organization for assistance from the Fund should be subject to 5% of the budget of IEPF during that financial year and not exceeding 80% of the amount to be spent on the proposed programme/activity.
(iii)	The associations or institutions or organizations already engaged in activities relating to investor awareness, education and protection and proposing to take up investors programmes, organizing seminars, symposia etc. shall undertake projects for investor protection including research activities.
(iv)	The associations or institutions or organizations shall be registered under the Societies Registration Act or formed as Trusts or incorporated companies.
(v)	Associations or institutions or organizations, shall unless specific exemption has been made in this regard by the Committee on IEPF, be in existence for a minimum period of 2 years prior to its date of application for registration.
(vi)	Associations or institutions or organizations shall have a minimum of 20 Members and a proven record of 2 years.
(vii)	The association or institution or organization shall have rules, regulations and or by-laws for the governance and management of the association or institution or organization. These rules, regulations and or by-laws shall be in conformity with the conditions of registration. The association or institution or organization shall be managed by a governing Board/management committee.
(viii)	No profit making association or institution or organization shall be eligible for registration for the purposes of financial assistance from the fund.
(ix)	Notwithstanding the above the Committee on IEPF can give a project to any organization.
(x)	The amount of grant assistance given from the Fund shall be subject to an audit by the Department of Company Affairs to ensure its proper utilization.
(xi)	While considering the proposals the Committee will take into account the audited accounts and the annual reports of the last three years of the organization seeking assistance from the Fund.

Guest

Posted on 08 March 2011

THANKS FOR GOOD INFO...................

Nitish Lath

Accounts Manager

29 Points Posted on 27 July 2012

A Private Company Which does not have any Unclaimed Amount of Share Application Money & Unpaid Dividend.Is it mandatory to file Return of Investor Protection & Education Fund for Such Company.

vikas

Student CA Final

22 Points Posted on 15 April 2015

what is the procedur to take back your claim from INVESTOR EDUACTION AND PROTECTION FUND (1956 & 2013)....

dinesh chandra

B.Com

22 Points Posted on 20 June 2015

what is the procedur to take back your claim from INVESTOR EDUACTION AND PROTECTION FUND (1956 & 2013).... Read more at: /forum/all-about-investor-education-and-protection-fund-must-read-133644.asp

Your are not logged in . Please login to post replies

Click here to Login / Register

Recent Topics :

More recent discussions | Post

Menu

All about Investor Education and Protection Fund - Must Read

Guest

Guest

Guest

Nitish Lath

vikas

dinesh chandra

Leave a Reply

Recent Topics :

Related Topics :

Latest Job Openings

CA Article Assistant

SENIOR AUDITOR & ACCOUNTS MANAGER

Article/ Paid Assistant

Work at home

Accounts Executive

Assistant Manager - Finance & Compliance

Consultant - Reporting

Industrial Trainee

Menu

Forum Search

All about Investor Education and Protection Fund - Must Read

Guest

Guest

Guest

Leave a Reply

Recent Topics :

Related Topics :