Executive Summary:
This notification from the Ministry of Corporate Affairs amends the Investor Education and Protection Fund awareness and protection of investors Rules, 2001. The amendment includes corresponding new banks and their unpaid dividend accounts within the scope of the rules. These rules are effective from March 31, 2014.
Key Points / Main Content:
Amendments to the Investor Education and Protection Fund Rules:
* The rules are further amended and called the Investor Education and Protection Fund awareness and protection of investors Amendment Rules, 2014.
* The amendment rules come into force on March 31, 2014.
Inclusion of Corresponding New Banks:
* A new definition of "corresponding new bank" is inserted, referencing the Banking Companies Acquisition and Transfer of Undertakings Acts of 1970 and 1980.
* Money transferred to the Unpaid Dividend Account of a corresponding new bank, which remains unpaid or unclaimed for seven years, is included within the fund's scope.
* The words "company and corresponding new bank" are to be substituted for the word "company" in Form 1 of the rules.
Impact Analysis:
Companies:
Impact: Companies are now explicitly required to include money as provided in the Act.
Action Required: Companies must ensure compliance with the updated rules regarding the transfer of funds and the updated definitions.
Corresponding New Banks:
Impact: Corresponding new banks are now subject to the rules regarding unpaid dividend accounts.
Action Required: Corresponding new banks must adhere to the rules for transferring unclaimed dividends to the Investor Education and Protection Fund after seven years.
Investors:
Impact: Investors are indirectly affected through enhanced protection and awareness facilitated by the fund, which now includes unclaimed dividends from corresponding new banks.
Action Required: No direct action is required from investors.
Ministry of Corporate Affairs:
Impact: Responsible for enforcing the updated rules.
Action Required: Ensure effective implementation and monitoring of the amended rules.
Key Entities Referenced
Investor Education and Protection Fund: A fund established for investor education and protection.
Companies Act, 1956: An Indian legislation regulating companies. Specifically, subsection 1 of Section 642 read with subsection 3 of Section 205C of the Companies Act, 1956 is mentioned.
Investor Education and Protection Fund awareness and protection of investors Rules, 2001: The original rules being amended by this notification.
Investor Education and Protection Fund awareness and protection of investors Amendment Rules, 2014: The name of the amendment rules introduced in the notification.
Central Government: The governing authority making the rules.
Banking Companies Acquisition and Transfer of Undertakings Act, 1970: An Indian legislation related to the acquisition and transfer of banking companies.
Banking Companies Acquisition and Transfer of Undertakings Act, 1980: An Indian legislation related to the acquisition and transfer of banking companies.
New Delhi: The location where the notification was issued.
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MINISTRY OF CORPORATE AFFAIRS
NOTIFICATION
New Delhi, the 27th March, 2014
G.S.R. 216(E).—In exercise of the powers conferred by sub-section (1) of Section 642 read with
sub-section (3) of Section 205C of the Companies Act, 1956 (1 of 1956), the Central Government hereby
makes the following rules further to amend the Investor Education and Protection Fund (awareness and
protection of investors) Rules, 2001, namely :—
1. (1) These rules may be called the Investor Education and Protection Fund (awareness and
protection of investors) Amendment Rules, 2014.
(2) They shall come into force with effect from the 31st March, 2014.
2. In rule 2 of Investor Education and Protection Fund (awareness and protection of investors)
Rules, 2001 (hereinafter referred to as the said rules), after clause (d), the following clause shall be inserted,
namely :—
‘(da) “corresponding new bank” means the corresponding new bank as defined in clause (d) of
section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of
1970) and clause (b) of section 2 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1980 (40 of 1980);’
3. In rule 3 of the said rules, in sub-rule (i), after the words “Any money required to be credited by
the companies to the fund, as provided in the Act”, the following shall be inserted, namely:-
“and any money transferred to the Unpaid Dividend Account of a corresponding new bank in
pursuance of section 10B of Banking Companies (Acquisition and Transfer of Undertakings) Act,
1970 and section 10B of Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1980, which remains unpaid or unclaimed for a period of seven years from the date of such
transfer”
4. In Form 1 annexed to said rules, for the word “company”, wherever it occurs, the words
“company and corresponding new bank” shall be substituted.
[F. No. 5/29/2013-IEPF]
AMARDEEP SINGH BHATIA, Jt. Secy.
Note :—The principal notification was published in the Gazette of India vide number G.S.R. 750(E), dated
the 1st October, 2001 and further amended vide following :—
(i) GSR 135 (E), dated 03.03.2006
(ii) GSR 93 (E), dated 20.02.2007
(iii) GSR 787(E), dated 14.11.2008
Printed by the Manager, Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054