The corporate affairs ministry has sketched out roadmap for full implementation of the new Companies Act, which envisages setting up new bodies, Protection Fund Authority (IEPFA) and National Financial Reporting Authority (NFRA) within six months.
Further, towards this development, the government is in final stages of notifying rules for IEFPA and NFRA, a quasi-judicial apex body for accounting and auditing standards, with powers to probe and review audits of companies.
NFRA will have the authority to conduct investigations on references made by the central government or any regulator. It can suo motu start an investigation in public interest and also posses the power to penalize and debar audit firms. Meanwhile, IEPFA would be set up under the new Companies Act and 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. It will be responsible for registering associations, institutions and professional bodies, among others, that are engaged in investor education and protection activities.
Notably, so far since the Companies Act 2013 took effect, i.e. since April last year, 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.