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1.
Commencement: |
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1. (1) |
These rules may
be called the
Investor
Education and
Protection Fund
(awareness and
protection of
investors)
Rules, 2001.
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(2) |
They shall
come into force
on the date of
their
publication, in
the Official
Gazette.
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2.
Definitions:
In these
rules, unless
the context
otherwise
requires:-
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a. |
‘Act’
means the
Companies Act,
1956;
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b. |
‘Fund’ means the
Investor
Education and
Protection Fund
(IEPF)
established
under
sub-section (1)
of 205C of the
Act, 1956 (1 of
1956); |
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c. |
“Ministry”
or “Department”
means Ministry
or Department of
the Central
Government
dealing the
Company Affairs; |
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d. |
‘Committee’/’Sub
Committee’ means
the Committee
specified by
Central
Government under
sub-section (4)
of section 205C
of the Act to
administer the
Fund. |
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e. |
‘Form’ means
forms prescribed
by these rules;
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f. |
Words and
expressions used
in these rules
and not defined
herein but
defined in the
Act shall have
the meaning
respectively
assigned to them
in the Act.
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3. Credits to
the Fund
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| (i) |
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 and the
amount so
credited shall
be accounted for
as provided in
Rule 4.
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(ii) |
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a. |
The amount shall
be tendered by
the companies on
behalf of the
Central
Government in
such 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. |
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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
the nature of
the amount
tendered and its
Head of Account.
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c. |
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| (i) |
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
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.Provided
that each Company
shall 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 payable,
for a period of
three years and the
Committee or
Sub-Committee shall
have powers to
inspect such records
of that period. |
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(ii) |
On receipt of
this statement, the
concerned Registrar
of Companies shall
enter the details of
such receipt in a
register and
reconcile the amount
so remitted and
collected, with the
concerned Pay and
Accounts Officer, on
monthly basis. |
| (iii) |
Each Registrar
of Companies shall
furnish an abstract
of such receipt
received during the
month to Department
of Company Affairs
within seven days
from the close of
the month. |
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(iv) |
Department of
Company Affairs
shall maintain a
consolidated
abstract of receipts
and shall reconcile
them on a quarterly
basis with Principal
Pay and Accounts
Office of the
Department of
Company Affairs.
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4. Manner of
Accounting:
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(i) (A) |
All amounts
received shall be
accounted for under
the following Heads
of account, which
shall thereafter be
transferred to the
Fund.
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MAJOR HEAD 0075 –
Miscellaneous
General Services.
Major Head 104 –
Unclaimed and Unpaid
dividends, deposits
and debentures etc.
of Investors in
companies:
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(a) |
Unpaid
dividend.
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(b) |
Unpaid
application
money
received by
Companies
for
allotment of
securities
and due for
refund.
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(c) |
Unpaid
Matured
Deposit.
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(d) |
Unpaid
Matured
Debentures.
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(e) |
Interest
accrued on
(a) to (d).
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| (i) |
Interest on
unpaid dividend.
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(ii) |
Interest on
unpaid application
money received by
Companies for
allotment of
securities and due
for refund.
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(iii) |
Interest on
unpaid matured
deposit.
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(iv) |
Interest on
unpaid matured
debentures.
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Note: (a) to (d)
shall be sub-heads,
(e) (i) to (iv)
shall be detailed
heads.
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| (i) |
(B) Grants and
donations given to
the Fund by the
State Governments,
Companies or any
other Institutions
will be credited
under the Sub-Head
under the Minor Head
‘800-Other Receipts
below the Major Head
’0075- Miscellaneous
General Services
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(ii) |
All expenditure
for the purposes of
carrying out the
objects for which
the Fund has been
established shall be
incurred under the
functional Head
expenditure head of
Department of
Company Affairs and
equivalent amount
will be shown as
deduct entry by
transfer of amount
from the Fund.
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(iii) |
Surplus
amount, if any, from
the fund accounts
shall not, for the
present, be utilized
for investment
purpose.
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5. Expenses of the
Committee:
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(a) |
The official
member of the
committee or
sub-committee shall
be entitled to
Traveling Allowance
according to the
rules regulating
their official
position.
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(b) |
For Journeys
performed by a
non-official
member of the
Committee or
Sub-Committee or
a special
invitee in
connection with
the work of the
committee or a
sub-committee
shall be
entitled for
TA/DA as per
supplementary
Rules of Central
Government.
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(c) |
Committee
shall have
powers to
recommend
appointment
/remuneration to
any experts in
such areas as
may be
considered
necessary.
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(d) |
Committee
shall have
powers to
recommend
appointment of
Auditors and for
scrutinizing the
accounts of the
voluntarily
agencies
registered with
it.
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6. Audit of
Accounts:
The accounts of the
Fund shall be
audited by internal
audit party of the
Department of
Company Affairs
every year and will
also be subject to
audit by the office
of Comptroller and
Auditor General of
India.
7. Constitution and
Functions of the
Committee:
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(a) |
The Committee
shall consist of ten
members, excluding
the Chairperson who
is Secretary, to the
Department of
Company Affairs. The
members shall be
nominated by Reserve
Bank of India, the
Securities and
Exchange Board of
India and or from
any other Ministry
or Department of
Central Government
dealing with
investor protection
activities and
experts from the
field of investors’
education and
protection. The
non-official Members
shall hold office
for a period of two
years. The Official
members shall hold
office for a period
of two years or
until they occupy
their position which
ever is earlier. The
constitution of the
Committee shall be
notified in the
Official Gazette.
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(b) |
Functions of the
Committee:
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(I) |
The Committee
shall recommend the
following activities
relating to
investors’
education, awareness
and protection:
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(a) |
Education Programmes through
Media;
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(b) |
Organizing
Seminars and
Symposia; |
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(c) |
Proposals for
registration of
Voluntary
Associations or
Institution or other
Organizations
engaged in Investor
Education and
Protection
activities; |
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(d) |
Proposals for
projects for
Investors’ Education
and Protection
including research
activities and
proposals for
financing such
projects; |
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(e) |
Coordinating
with institutions
engaged in Investor
Education, awareness
and protection
activities; |
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(f) |
Proposals for
setting up of
institutional
arrangements or
infrastructure for
taking up programmes,
projects and action
plans keeping in
view the objectives
and expenditure
relating thereto,
including research
and training
activities.
The Committee may
also be entrusted
with such other
functions for
carrying out the
objects for which
the Fund has been
established. |
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(g) (i) |
The
Committee may
appoint one or more
sub-Committees
whenever it
considers necessary
to facilitate
efficient and speedy
discharge of its
functions. |
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(ii) |
Sub-Committee
shall be
constituted from
amongst the
members. |
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(iii) |
The Chairperson
of the Committee
may nominate any
one of the
members of the
Sub-Committee as
its convenor and where
no such nomination
has been made, the
members of the
Sub-Committee elect
a convenor amongst
themselves. |
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(iv) |
The Committee
may have
Sub-Committee to
examine the end
use of grants
and assistance
and recommend
release of
funds.
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8. Power to call
upon a Company:
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| (i) |
The Committee
shall have suo moto
powers to call upon
any company to pay
the amount due to
the Fund. |
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(ii) |
Committee shall
call upon any
company to give
estimates of the
amounts to be
credited to the Fund
in form 2.
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9. Report by the
Committee:
The Committee shall
furnish its activity
report for every six
month’s period to
the Central
Government.
10. Meetings:
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| (i) |
One third of the
total members
subject to five
members in the case
of meeting of
committee and three
members in case of
sub-committee
meeting shall
constitute a quorum. |
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(ii) |
The Chairperson
of the Committee and
the convenor of a
Sub-Committee,
respectively, shall
preside over the
meetings of the
Committee or the
Sub-Committee as the
case may be. In the
event of the
Chairperson or, as
the case may be, the
convenor being
unable to attend the
meeting for any
reason, the members
present may elect
one amongst
themselves to
preside over the
meeting. |
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(iii) |
The Chairperson
of the Committee
or the convenor
of a
sub-Committee
may, call
meeting of the
Committee or a
Sub-Committee:
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Provided that the
Chairperson or the
Convenor, as the
case may be, shall
also call a meeting
if a requisition for
that purpose is
presented to him by
at least five
members in the case
of the Committee and
three members in the
case of a
Sub-Committee.
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(iv) |
At least
fourteen clear days’
notice indicating
the time and place
of the meeting shall
be sent to the
members of the
Committee or the
Sub-committee as the
case may be:
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Provided that in
case of urgency, a
special meeting of
the Committee or
Sub-Committee may be
called at any time
by the Chairperson
or the convenor, who
shall inform the
members at least
three clear days in
advance of the
subject matter for
consideration at the
meeting and the
reasons for which he
considers the
meeting urgent;
Provided further
that no other
business shall be
transacted at such a
meeting.
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(v) |
The Chairman or
the convenor, as the
case may be, may
invite any person to
attend any meeting
of the Committee or
Sub-Committee as a
special invitee but
such person shall
not be entitled to
vote.
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11. Agenda:
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| (i) |
At least seven
clear days before
any meeting of the
Committee or a
Sub-Committee,
except meeting
referred to in provisio to sub-rule
(iv) to rule 10, a
list of business
proposed to be
transacted at the
meeting shall be
sent to the members
of the Committee or
of a Sub-Committee,
as the case may be. |
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(ii) |
No business,
not included in the
list of business,
shall be transacted
at a meeting without
the permission of
the Chairperson
presiding over the
meeting.
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12. Voting:
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| (i) |
Every question
brought before any
meeting of the
Committee or
Sub-Committee, as
the case may be,
shall be decided by
a majority vote of
members present and
voting at the
meeting. No member
shall vote by proxy. |
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(ii) |
In the event of
equality of votes,
at a meeting, the
Chairperson or the convenor, as the
case may be or in
his absence, the
person presiding,
shall have a second
or casting vote.
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13. Minutes:
The minutes of the
meeting of the
Committee or
Sub-committee shall
be caused to be
recorded and
circulated among the
members.
14. Conditions for
Utilization of Funds
by the Committee:
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| (i) |
The Committee
may register from
time to time various
Associations or
institutions or
organizations,
engaged in
activities relating
to investor
awareness, education
and protection and
proposing for
Investors programmes;
organizing seminar,
symposia and
undertake projects
for Investor
Protection including
research activities. |
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(ii) |
Application for
registration by such organisations
referred to in
sub-rule (i) be made
in Form-3. |
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(iii) |
Application
for release of funds
for the activities
listed in Rule 7(1)
from the
organizations or
Institutes
registered with the
Department of
Company Affairs
shall be made in
Form 4. |
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(iv) |
A copy of the
summary or
recommendations of
the seminar or programme conducted
and copy of Accounts
for such activity by
such organisation
e.g., registered
associations or
chambers of commerce
or institutes shall
be provided to the
Committee within ten
days of the
conclusion of the
seminar or programme. |
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(v) |
The organization
or Associations
registered shall be
considered for grant
of funds as a
grant-in-aid either
as one time measure
or in stages or by
way of reimbursement
depending upon the
nature of the
activity proposed. |
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(vi) |
The Committee
shall be entitled to
examine the end use
of grants and
assistance before
recommending release
of funds. |
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(vii) |
The Committee
shall cause to draw
at the end of each
Financial Year, a
statement of Total
Receipts from
various sources
indicated in section
205C of the
Companies Act, 1956
and the grants
disbursed or the
expenditure incurred
in connection with
the activities
organized by the
Committee or
Sub-Committee and
other expenditure
incurred for holding
the meetings. |
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(viii) |
The Committee
shall maintain the
necessary records
showing amount
disbursed, date of
disbursal, the name
of Organisation or
Voluntary agency,
the activities of
the agency for which
such disbursal was
made.
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