No. 5/5/2000-CL.V

Government of India

Ministry of Law, Justice & Company Affairs

Department of Company Affairs

 

5^th floor, `A’ Wing, Shastri Bhavan,

Dr. R.P. Road, New Delhi.

Dated:  3^rd October, 2001

 

PRESS NOTE 6/2001

 

Subject: Establishment of Investor  Education and Protection    Fund. 

 

 

                   Pursuant to the provisions of section 205C of the Companies   Act, 1956, the Central Government has notified the establishment of a Fund called Investor Education & Protection Fund  with effect from 1.10.2001. The fund shall be credited with the following amounts :

 

(a)   amounts in unpaid dividends 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) .

       

          The amounts referred to in clause (a) to (e) that shall form part of the  fund are such amounts that have  remained unclaimed and  unpaid for a period of seven years from the date they become due for   payment. 

         

2.    The Central Government in exercise of its powers under section 642 have also notified rules for operationalising the Fund  called Investor Education and Protection  ( Awareness and Protection  of Investors) Rules 2001.

3.       The  Investor Education & Protection Fund shall be utilised for promotion of Investors’   awareness &  protection   of   the   interest   of Investors in accordance with Investor Education & Protection Fund Rules 2001.

 

4.        The Rules provide for the modalities as to how the companies shall credit their unclaimed amounts to the Fund,  furnish details to the concerned  Registrar of Companies, 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, the matters relating to meetings and how the Committee will register various voluntary agencies or Non-Government  Organisations engaged in the activities relating to Investors awareness & education and recommend the utilization of funds for  Education Programs, organising seminars and conducting projects for Investor protection including research activity, to them.

5.                 It is hoped that the companies will duly comply with the legal requirements  of depositing the amounts to the Investor Education and Protection Fund for the benefit of investing community.

 

6.     A copy of this Press Note has also been placed at the Web page of the Department of Company affairs at the Internet Address http://www.nic.in/dca.

 

 

 

(A. RAMASWAMY)

                              Joint Secretary to the Government of India.

 

 

Endt.No. 5/5/2000-CL.V     dated: 3^rd October, 2001

 

 Copy forwarded to Shri M.Y. Siddiqui, PIO, Press information Bureau, Shastri Bhavan, New Delhi with the request that the Press Note may kindly be given wide publicity.

 

 

 

 (A. RAMASWAMY)

Joint Secretary to the Govt. of India

Ph: 338 1226