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Panel proposes single agency to redress investor woes
Panel proposes single agency to redress investor woes. To resolve investor problems speedily, a Parliamentary panel has suggested bringing the grievance redressal mechanism under the proposed Investor Education and Protection Fund (IEPF) Authority.
Investors often short-changed by unscrupulous promoters and dubious companies
The proposed IEPF Authority is responsible for administration of investor education and protection of funds, undertaking investor awareness, refund of unclaimed amounts, distribution of disgorged money and reimbursement of legal expenses under class action suits
New Delhi: To resolve investor problems speedily, a Parliamentary panel has suggested bringing the grievance redressal mechanism under the proposed Investor Education and Protection Fund (IEPF) Authority.
The suggestion has come against the backdrop of rising instances of investors getting duped by fraudulent investment schemes and dubious companies. The panel has pointed out that in setting up of the IEPF Authority, under the new companies law, has taken an "unduly long time".
Under the Companies Act, 2013, the Corporate Affairs Ministry is to set up the IEPF Authority but it would not cover redressal of investor grievances in the proposed form.
Noting that solution to the investor grievances has remained an area of neglect, the panel said that small investors "have often been short-changed by unscrupulous promoters and dubious companies".
These observations are part of the Standing Committee on Finance's report on action taken by the government on the recommendations made by the panel on Demands for Grants (2014-15).
The proposed IEPF Authority would be responsible for administration of investor education and protection of funds, undertaking investor awareness, refund of unclaimed amounts, distribution of disgorged money and reimbursement of legal expenses under class action suits.
According to the panel, excluding investor grievances from the mandate of IEPF Authority "will do no justice to the investors' fraternity". "The Ministry should include all investor-related activities including redressal of investor grievances under the ambit of the Authority as it will act as a single window for all investor problems," the report said.
Referring the Indian Institute of Corporate Affairs (IICA), the panel said the organisation should redefine itself rather than just being a training institution. "Considering the amount of investments which has gone into creating such massive infrastructure of the Institute, much more needs to be done," it noted.
IICA should not limit its scope by merely becoming a training institution for the probationers of the Indian Corporate Law Service and other officials of the Ministry, the report said. "It should rather redefine its role and pro-actively position itself in the market as a leading research-based institute, which can serve the growing needs of Indian industry in the area of corporate law and practice," it added.
