Government to implement new Companies Act that includes setting up IEPFA and NFRA
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The corporate affairs ministry has charted its road map for full implementation of the new Companies Act that envisages setting up Investor Education and Protection Fund Authority (IEPFA) and National Financial Reporting Authority (NFRA) within six months.
The government is already in final stages of notifying rules for IEPFA and NFRA, a quasi-judicial apex body for accounting and auditing standards, also with powers to probe and review audits of companies.
Since April last year, when the Companies Act 2013 took effect, only 60% sections of law have been notified while 187 sections related to investor protection and winding up of companies are yet to be notified.
"New bodies proposed in the Companies Act 2013 will be made functional within six months as we are already in the later stages of finalising the rules, which will be notified soon," said a senior MCA official. NFRA will be responsible for monitoring, compliance review and overseeing quality of service, enforcement and standard setting in accounting and auditing.
"The authority will have powers to carry out investigation or quality review of audit of listed and certain class of unlisted companies. NFRA will have the authority to conduct investigation on reference made by the central government or any regulator. It can suo motu start investigation in public interest and will also have the power to penalise and debar audit firms," added the official, requesting anonymity.
IEPFA, which will be set up under the new Companies Act, will manage investor education and protection fund. If the amount deposited with companies is not claimed for more than seven years, it will go to IEPFA. Companies currently have aboutRs 3,500 crore in unpaid dividends, unclaimed debentures and deposits.
It will be responsible for registering associations, institutions and professional bodies, among others, that are engaged in investor education and protection activities. (Economic Times)
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