Monday, August 1 2005 11:55 Hrs (IST) - World Time -

New Delhi: Contrary to the recommendation of the Joint Parliamentary Committee, which went into the stock market scam for transfer of Investor Education, and Protection Fund (IEPF) to Security and Exchange Board of India (SEBI) Government said the fund would remain with the Ministry of Company Affairs (MCA).

A committee of the IEPF also rejected the SEBI's proposal for funding the cost and expenses of capital market Ombudsman from the IEPF.

"The matter of transfer of IEPF to SEBI was taken up with the Ministry of Company Affairs, which was of the view that the IEPF having been set up under the provisions of Companies Act was appropriately administered by MCA.

"Accordingly, a committee on IEPF of MCA, after duly examining the proposal for transfer of IEPF to SEBI did not approve the proposal," the Government's Fourth Action Taken Report on the JPC's findings said.

Stressing on the need for coordinated and organised efforts to investors about their rights and responsibilities, the JPC had suggested that to enable SEBI to undertake this responsibility, the IEPF should be shifted to SEBI.

The JPC had also recommended that unclaimed/undistributed funds such as dividends, principal amount, interest, debenture amount and fixed deposits of any nature and instruments with limited companies, cooperative banks, banks, mutual funds and insurance companies should be transferred to the IEPF.