Context: Recently Investor Education and Protection Fund Authority (IEPFA) has released an advisory regarding diversification of investment across different assets to reduce risk.
About IEPFA:
- Government of India established Investor Education and Protection Fund Authority in 2016 under the provisions of Section 125 of the Companies Act, 2013, for administration of Investor Education and Protection Fund.
- It comes under Ministry of Corporate Affairs and is chaired by Secretary to the Ministry of Corporate Affairs.
- The Authority is entrusted with the responsibility of administration of the Investor Education Protection Fund (IEPF), making refunds of shares, unclaimed dividends, matured deposits/debentures etc. to investors and to promote awareness among investors.
Objectives of IEFPA:
- The Authority is entrusted with the responsibility of administration of the Investor Education Protection Fund (IEPF).
- Make refunds of shares, unclaimed dividends, matured deposits/debentures etc. to investors.
- Promote awareness among investors.
About Investor Education and Protection Fund (IEPF): IEFP has been established with a view to support the activities relating to investor education, awareness, and protection. Following are the objectives/ activities of the Fund:
- Educating investors about market operations and making investors aware about market volatilities.
- Equipping investors to analyze information to take informed decisions.
- Empowering the investors by making them aware of their rights and responsibilities under various laws.
- Disseminating information about unscrupulous elements and unfair practices in securities market.
- Broadening the investors’ base by encouraging new investors to participate in securities market.
- Promoting research and investor surveys to create a knowledge base that facilitate informed policy decisions.
Section 125 of Companies Act, 2013: Investor Education and Protection Fund. — (1) The Central Government shall establish a Fund to be called the Investor Education and Protection Fund.
- The Fund shall be utilized for— the refund in respect of unclaimed dividends, matured deposits, matured debentures, the application money due for refund and interest thereon.
- promotion of investors ‘education, awareness, and protection.
- distribution of any disgorged amount among eligible and identifiable applicants for shares or debentures, shareholders, debenture-holders, or depositors who have suffered losses due to wrong actions by any person, in accordance with the orders made by the Court which had ordered disgorgement.
- reimbursement of legal expenses incurred in pursuing class action suits under sections 37 and 245 by members, debenture-holders or depositors as may be sanctioned by the Tribunal.
- any other purpose incidental thereto, in accordance with such rules as may be prescribed.