Investor Protection Fund launched

By Our Legal Correspondent

NEW DELHI, OCT. 4. The Central Government has notified the establishment of the Investor Education and Protection Fund under Sec. 205C of the Companies Act, with effect from October 1.

According to an official release, the fund will be credited with the following amounts: amounts in unpaid dividend accounts of companies; application moneys received by companies for allotment of any securities and due for refund; matured deposits with companies and interest accrued on amounts in the above accounts.

The amounts referred to above will form part of the fund are such amounts that have remained unclaimed and unpaid for seven years from the date they became due for payment.

The Centre has also notified the rules for operationalising the fund called the Investor Education and Protection (Awareness and Protection of Investors) Rules, 2001.

The Rules provide for the modalities as to how the companies will credit their unclaimed amounts to the fund, furnish details to the Registrar of Companies concerned, the manner of accounting of the money received, constitution and function of the committee, expenses of the committee and audit of its accounts, the powers of the committee, matters relating to meetings and how the committee shall register various voluntary agencies or non- government organisations engaged in the activities relating to investors awareness and education and recommend the utilisation of funds for education programmes, organising seminars and conducting projects for investor protection including research activity to them.

The Government hopes that companies will duly comply with the legal requirements of depositing the amounts to the fund for the benefit of the investing community.

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Section  : Business
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