New Delhi ~ 9th October

Pursuant to the provisions of Section 205 C of the Companies Act 1956 the Central Government has notified the establishment of a Fund called Investor Education & Protection Fund with effect from October 1 2001. The fund shall be credited with the following amounts:

(a) Amounts in unpaid dividends accounts of companies;
(b) the application moneys received by companies for allotment of any securities and due for refund;
(c) matured Deposits with companies;
(d) the interest accrued on the amounts referred to in clauses (a) to (d).
(e) The amounts referred to in clause (a) to (e) that shall form part of the fund are such amounts that have remained unclaimed and unpaid for a period of seven years from the date they become due for payment.

The Central Government in exercise of its powers under section 642 have also notified rules for operationalising the fund called Investor Education and Protection (Awareness and Protection of Investors) Rules 2001. The Investor Education & Protection Fund shall be utilised for promotion of Investors' awareness & protection of the interest of Investors in accordance with Investor Education & Protection Fund Rules 2001.

The Rules provide for the modalities as to how the companies shall credit their unclaimed amounts to the Fund furnish details to the concerned Registrar of Companies the manner of accounting of the money received constitution and function of the committee expenses of the committee and audit of its accounts the powers of the committee the matters relating to meetings and how the Committee will register various voluntary agencies or Non-Government Organisations engaged in the activities relating to Investors awareness & education and recommend the utilisation of funds for Education Programmes organising seminars and conducting projects for Investor protection including research activity to them.

It is hoped that the companies will duly comply with the legal requirements of depositing the amounts to the Investor Education and Protection Fund for the benefit of investing community.

A copy of this Press Note has also been placed at the Web page of the Department of Company affairs at the Internet Address http://www/nic.in/dca.