The Hindu Business Line : Consumer forum urges transfer of IE&PF to SEBI

THE Consumer Education and Research Centre (CERC), Ahmedabad, has requested the Union Finance Minister, Mr P. Chidambaram, to transfer the Investors' Education & Protection Fund (IE&PF) to the Securities and Exchange Board of India (SEBI) from the Department of Company Affairs (DCA).

The Fund was created with the unclaimed and unpaid dividend amounts, application money and deposits with companies lying unutilised for over seven years with the DCA. The Fund was set up under Section 205 C of the Companies Act, 1999. A committee set up under the chairmanship of Dr N.L. Mitra in its report suggested that since SEBI had been constituted specially to protect the interest of the investors, the Fund should be administered by SEBI, it said.

The committee recommended that the Companies Act be repealed and similar changes be incorporated in the SEBI Act to transfer the Fund, the CERC said in its letter to the Finance Minister. Stating further, it said, SEBI's step to establish investors' protection funds in the stock exchanges, increasing the disclosure requirements, introducing disclosures of quarterly financial results of companies and strengthening the accounting standards of the companies by reporting deferred tax liability. had boosted the morale of the stock market.

Arguing further, it said, SEBI also involved non-profit citizen's groups viz., investors protection associations in the various activities to promote and protect investors' interest. SEBI organised meetings of investors' associations at regular intervals and gave due representation to the various investors' associations on its various committees — primary capital market advisory committee, secondary capital market advisory committee and demat committee. Thus, SEBI was a more appropriate authority to manage the Fund and hence the plea, CERC said.

CERC has also requested the Members of Parliament from Gujarat to take up the issue with the Finance Minister and urge him to divert the Fund from the DCA to SEBI.

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