All You Need to Know About Investor Education and Protection Fund(IEPF)

IEPF i.e. Investor Education and Protection Fund is a special fund set aside by the government for the interest of the investors in India.
For instance, market regulator SEBI can use it to compensate investors for losses incurred from irregularities in capital markets. Similarly, the central bank RBI uses it to fund seminars and studies on banking practices, etc.

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How is IEPF funded?

IEPF is funded by many sources. For instance, unclaimed dividends, matured company deposits, and debentures that haven’t been claimed during a period of 7 years are put into the IEPF fund. However, it’s monitored by a trust for matters concerning how much money should be used for certain activities.
It’s the Registrar of Companies that draws money from the IEPF with the authorization granted under subsection 4. It also collects receipts for the expenses, the database of which is maintained by the Ministry of Corporate Affairs (MCA).

How are the research projects approved for the IEPF?

Research projects are approved for the IEPF fund on the basis of submission of:

• A 2000-word roadmap of the research project which explains why it’s a good fit for IEPF’s goals.
• Comprehensive resume of all the researchers who shall be a part of the project
• 3 of the best published or unpublished research papers of the researchers
• Letters of commitment by the researchers in which they promise to give a minimum of 50% of their time for the project until completion.

What funds are required to be credited in the IEPF?

In accordance with the section 125 of the Companies Act 2013, the following are some of the funds that must be transferred to IEPF:

• Donations given to the fund by state/central government, private or public institutions. etc.
• Interest earned on the incomes generated by the fund
• Matured company deposits and debentures that aren’t claimed for 7 years