• The Investor Education and Protection Fund Authority (IEPFA), under the Ministry of Corporate Affairs, had formed a Committee to review existing procedures and recommend reforms for simplifying documentation in low value claim cases. 

• This initiative was expected to significantly reduce timelines, improve transparency, and provide hassle-free services to investors.

• The Committee has submitted its report to the IEPFA.

• The suggestions, once adopted by IEPFA, would be applicable to claims valued up to Rs 5 lakh (physical securities), Rs 15 lakh (demat securities), and dividends up to Rs 10,000, as suggested by the Committee.

Investor Education and Protection Fund Authority (IEPFA)

• Investor Education and Protection Fund (IEPF) was set up under Section 125 of the CA-13 with the objective of promoting investor education, awareness, protection and to make refunds of claims to the investors.

• The fund is maintained under the Consolidated Fund of India. 

• As per Section 124(6) of the Act, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall be transferred by the company in the name of Investor Education and Protection Fund.

• For administration of the Fund, in accordance with the provision of Section 125(5) of the Act, the government established Investor Education and Protection Fund Authority (IEPFA) which became functional on September 7, 2016. 

• The IEPFA is entrusted with the responsibility of administration of the Investor Education Protection Fund, making refunds of shares, unclaimed dividends, matured deposits/debentures etc to investors, promoting awareness among investors, and protecting the interests of the investors.

• As per the IEPFA (Appointment of Chairperson and Members, holding meetings and provision for offices and officers) Rules, 2016, the IEPFA will have a chairperson, six members and a Chief Executive Officer. 

• The Secretary, Ministry of Corporate Affairs, is ex-officio Chairperson of the Authority. 

• The IEPFA has been entrusted with the responsibility to make refunds of amounts like unclaimed dividends, matured deposits, matured debentures and shares transferred to it and to promote investor education, awareness, and protection.

• Through its initiatives, the IEPFA aims to ensure transparency, protect investors’ rights, and promote financial literacy across the country.