IEPF is the acronym for Investor Education and Protection Fund. IEPF Authority was set up with the objective to promote awareness amongst financial investors and educate them about unclaimed benefits of companies.
IEPF has been set up by the Ministry of Corporate Affairs (MCA). IEPF Fund was incorporated under Section 205C of the Companies Act, 1956. After the introduction of the Companies Act, 2013, IEPF Authority was set up under Section 125(5) to administer the IEPF Fund.
Thus, after the establishment of the IEPF Authority, the following amounts are credited to the Fund:
- Dividend amounts of companies lying in the Unpaid Dividend Account
- Application money due for refund
- Matured deposit money
- Matured debentures
- Interest that gets accrued on the above three sources
- Grants/ Donations received from Central Government, State Government, corporate houses and other institutions
Noble Objectives of the Fund
The fund was set up with a mission – educating investors about market’s business operations. The objectives of IEPF are:
- Refunding the unclaimed amounts lying with the Fund.
- Educating the investors about legal rights and responsibilities related to company benefits.
- Sharing information about unscrupulous and unfair practices that happen in the securities market.
- Enhancing the investors’ base by encouraging more and more new investors to join the bandwagon and participate in the securities market.
- Last but not the least, promoting research and stepping up investor surveys in order to create a vast knowledge that would help people in informed policy decisions.
The Committee Members
The IEPF Committee has always been formed out of most reputed and top-ranking people who excel in domains of Capital Market, Accountancy, Tax Matters, Media and Management Consultation or Beaurocrats. Few of them hold top designations like Secretary, MCA, Joint Secretary and Financial Advisor, MCA, Executive Director, RBI and Executive Director, SEBI.
The Chairman of the committee is Secretary of MCA. The core team of IEPF has immense knowledge in aspects of investors’ education and protection.
IEPF Always Protects the Interest of Genuine Investors
In the year 2016, the Ministry of Corporate Affairs took a path-breaking initiative. Previously, unclaimed or unpaid money, once transferred to IEPF account, could not be refunded. In the process, many genuine investors suffered a setback. But as of now, unclaimed company benefits like dividends, matured amount of debentures, unclaimed shares could be claimed by filing in IEPF Claim application form.
The claimant needs to file the IEPF Form 5 on the online portal of IEPF (http://www.iepf.gov.in). Once the form is filled up with relevant details and all the essential documents are uploaded, it needs to be sent to the Nodal Officer of the company along with a physical copy of all the documents. After Company verification an e verification report is to be sent to the IEPF. On the basis of the verification report, the IEPF Authority credits the unclaimed rewards (money) to the Aadhaar linked bank account of the claimant. MCA21, the e-payment initiative of MCA handles all the online monetary transaction process.