FAQs on Investor Education and Protection Fund

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.

1. 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
    
2. Activities undertaken by IEPF till date
• Educating and creating awareness among investors through Voluntary associations or organizations registered under IEPF. – 65 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?

1. 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.
    
2. (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 description 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:

1. amounts in the unpaid dividend accounts of the companies;
    
2. the application moneys received by companies for allotment of any securities and due for refund;
    
3. matured deposits with companies;
    
4. matured debentures with companies;
    
5. the interest accrued on the amounts referred to in clauses (i) to (iv);
    
6. 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
    
7. 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:

1. Any organization/entity who has a viable project proposal on investors education and protection should be eligible for assistance from the Fund
    
2. 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.
    
3. 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.
    
4. The associations or institutions or organizations shall be registered under the Societies Registration Act or formed as Trusts or incorporated companies.
    
5. 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.
    
6. Associations or institutions or organizations shall have a minimum of 20 Members and a proven record of 2 years.
    
7. 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.
    
8. No profit making association or institution or organization shall be eligible for registration for the purposes of financial assistance from the fund.
    
9. Notwithstanding the above the Committee on IEPF can give a project to any organization.
    
10. 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.
     

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.

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