The Authority is entrusted with the responsibility of administration of the Investor Education Protection Fund (IEPF), make refunds of shares, unclaimed dividends, matured deposits/debentures etc. to investors and to promote awareness among investors. Investor Education and Protection Fund (IEPF) is a fund established by the Central Government in 1998 for promotion of investors’ awareness and protection of interests of investors.
Provisions of the Companies Act, 2013 mandate transfer of inter-alia unpaid dividends, application money received by Companies for allotment of any securities and due for refund, matured deposits, matured debentures to the fund. Further, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more are also to be transferred to the fund. Even further, all the resultant benefits arising on the shares so transferred to the fund are also to be transferred to the fund.
Majority of these unpaid dividends belong to shareholders who are not well informed of the legal formalities to claim them. Companies are mandated to keep a track of such unpaid dividends and underlying shares and transfer them to the fund in due course. Investors whose unpaid/ unclaimed amounts or shares are transferred to the fund can file an application to IEPF Authority for claiming such amounts and shares.
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