What Is The Role of IEPF
IEPF is also known as the Investor Education and Protection Fund. This authority was created with the goal of increasing and promoting awareness among different financial investors. This authority also educates and assists those investors regarding the benefits of the companies that have been unclaimed for several years. So, to know more about this IEPF authority and transfer of shares, let us discuss the role of IEPF.
What is IEPF?
IEPF department was created by MCA or the Ministry of Corporate Affairs. This fund was incorporated under the Companies Act, 1956, section 205C. After the introduction of the Companies Act, 2013, the authority of IEPF was created under Section 125(5) in order to administer and manage the IEPF fund.
Hence, after the creation and establishment of this IEPF authority, some notable amounts are credited to the fund, such as:
- Application money that is due for a refund.
- Dividend amounts of several companies remaining under the Unpaid Dividend Account.
- Matured debentures.
- Matured deposit money.
- Donations or grants are received from State Government, Central Government, corporate house, and other different institutions.
- Interest that can get accrued on the sources like matured deposit money, debentures, and application money that is due for a refund.
The crucial objectives of the fund
This fund was created with a specific mission, that is- to provide investors with knowledge about the business operations of the market. Some notable objects of the IEPF authority are:
- Educating the investors with crucial knowledge about legal responsibilities and rights related to the benefits of the company.
- The process of refunding the unclaimed shares and amounts lying with the fund.
- Sharing information regarding unfair and unscrupulous practices that may take place in the market of securities.
- Promoting accurate research and stepping up several investor surveys with the goal to create vast knowledge that can aid business persons and other people in making informed decisions regarding various policies.
- Improving and enhancing the base of the investors by encouraging a lot of new investors to take part in the bandwagon and participate in the market of securities.
IEPF strives to protect the interest of genuine investors
The Ministry of Corporate Affairs chooses a revolutionary initiative in the year 2016. Prior to this, the unpaid or unclaimed money, after getting transferred to an IEPF account, could not be received again or refunded.
In contrast, now, those company benefits that are unclaimed like shares, dividends, and matured debentures could be claimed by offering some important documents, along with filing in the IEPF application form.
For lost shares recovery, the applicant needs to fill up the IEPF Form-5 on the online portal of the IEPF department. After filling up the form, along with providing the related and required details, those details are sent to the Nodal Officer of the organization while providing a physical copy of all those related documents.
Then the company conducts verification and sends its report to the IEPF authority. Lastly, IEPF authority starts the procedure of refunding the unclaimed money or transmission of shares.
So, with the help of the new rule of the IEPF authority the process of lost shares recovery and dematerialization of shares can be completed with ease.
