PTI|
Updated: Jun 13, 2017, 10.17 PM IST
NEW DELHI: Retirement fund body EPFO has asked its field offices to ensure that the firms running private PF trusts are not investing the accumulated provident funds of employees in their own arms and entities.
The finance ministry in an investment pattern notified for the private PF trusts notified in 2015 has provided that these firms should adhere to the arm's length principle of investment of EPF funds.
"In the various reviews of EPF exempted establishments (private PF trusts), it has been found that many establishments invest accumulated PF fund amount in their own entity or in their subsidiary entities; therefore some check points are recommended to stop such practices, as provided in the pattern of investment 2015," an Employees' Provident Fund Organisation (EPFO) office order said.
It said the Board of Trustees of these EPF trusts, while investing the provident fund remittances shall adhere to the said norms.
A senior official said since the investment pattern notified by the finance ministry provides for arm's length principle of investment, this shall be implemented by the EPFO field formations for the EPF trusts regulated by them.
The official said the labour ministry is in the process of notifying the provision to include this clause in the Employees Provident Fund Scheme 1995.
The clause in the pattern provides that the Board of Trustees (BoT) of these trusts shall not invest in any of the securities/bonds issued by their own firm, whose provident fund money is being managed by the BoT.
It provides that the BoT shall not invest in any of the securities/bonds issued by their firm, with which the employer of the exempted establishment is related or occurring any key position like director, independent director etc.
The clause states that the BoT shall not invest in any of the Securities/bonds issued by the establishment, which is fully or partially owned subsidiary of their firm.
It also says that BoT shall not make investment, beyond 5 per cent of the fresh accretions in a financial year, in the securities of a firm in which their establishment holds over 10 per cent of the securities issued, and the total volume of such investments will not exceed 5 per cent of the total portfolio of the fund at any time.
Read more at:
http://economictimes.indiatimes.com/articleshow/59131893.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
No comments:
Post a Comment