Govt issues rules for IEPF Authority

The government has notified the rules for the Investor Education and Protection Fund (IEPF) Authority, which would help in strengthening efforts to safeguard the interest of investors.
IEPF Authority, being set up under the Companies Act, 2013, would advise the central government on issues related to investors' interest as well as register associations and other organisations that are engaged in investor education and protection activities.
The authority can also initiate legal cases against non-compliant companies and individuals.
IEPF Authority (Appointment of Chairperson and Members holding of meetings and provision for offices and officers) Rules, 2016, have been notified by the Corporate Affairs Ministry.

Corporate Affairs Ministry Secretary would be the Chairperson of the authority. It would have a Chief Executive Officer, who would also be the convener, and six members.
Apart from one representative each from the Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi), there would be four experts having experience of at least 15 years.

These members should have "special knowledge" in finance, management, accountancy or law.
According to the Ministry, a member would have a tenure of three years or till he/she attains the age of 65 years, whichever is earlier. An individual can be appointed only for up to three terms.

"A member shall be eligible for re-appointment after expiration of cooling off period of three years after his term," the Ministry said in a notification dated January 13.
The authority and its committees would have to meet at least once in a quarter.
Any member who has direct or indirect pecuniary interest in any matter that comes up before the authority should disclose the same and also stay away from meetings related to that particular matter.
"No suit, prosecution or other legal proceedings shall lie against the central government or authority or any office of the central government or any member, officer or other employee of the authority for anything, which is in good faith done or intended to be done under these rules," as per the rules.

The authority would have the responsibility to reimburse funds for meeting legal expenses incurred in pursuing class action suits by members, debenture holders or depositors as sanctioned by tribunal.