Government constitutes Investor Education and Protection Fund Authority

NEW DELHI: Government has constituted the Investor Education and Protection Fund (IEPF) Authority, moving ahead with efforts to further strengthen the framework for safeguarding the interest of investors.

This is a step closer to setting up the IEPF -- under the Companies Act, 2013 -- which would be utilised for multiple purposes, including to distribute disgorged amount to eligible depositors who have suffered losses due to wrongful acts by other entities.

In recent times, there have been rising instances of people getting duped by illegal fund raising schemes and having a fund is expected to help in disbursal of money to the affected entities in a timely manner.

A senior official said the IEPF Authority has been constituted and it would take some time before putting in place the IEPF itself.

The authority would have the responsibility of administering the fund as well as maintain separate accounts and other records as prescribed by the Comptroller and Auditor General (CAG), among others.

Recently, the government has constituted a six-member IEPF Authority under the chairmanship of Corporate Affairs Secretary Tapan Ray, according to a recent notification.

Sebi Executive Director Gyan Bhushan and RBI Executive Director U S Paliwal are also members. All the three memberships are ex-officio or till they continue in their respective posts.

Three others are independent members.

Besides, Amardeep Singh Bhatia has been appointed as the Chief Executive Officer to the Investor Education and Protection Fund Authority. This would be an additional charge for a period of six months from the date of his assumption of charge or till further orders, the Ministry said in a separate notification.

Currently, Bhatia is a Joint Secretary in the Ministry.

Various sections of the Companies Act, 2013 are yet to be notified. Most provisions of this law, which replaces the nearly six-decade Act regulating corporates, came into effect from April 1, 2014.