Markets regulator Securities and Exchange Board of India (Sebi) has come out with guidelines on Investor Protection Fund (IPF) applicable to commodity derivatives exchanges.
Markets regulator Securities and Exchange Board of India (Sebi) has come out with guidelines on Investor Protection Fund (IPF) applicable to commodity derivatives exchanges. Here’s what the IPF means to an investor:
– Claims of retail investors alone will be eligible for compensation from the IPF.
– Claims received against the defaulter member during the specified period shall be eligible for being considered for compensation from the IPF.
– If any eligible claim arises within three years from date of expiry of the specified period, such claims will be processed at the discretion of IPF trust.
– Any claim received after three years from the date of expiry of the specified period and not processed by the IPF trust will be dealt with as civil dispute.
– The IPF will be administered by a trust, which will comprise two eminent persons and one independent director on the board of the exchange.
– The IPF trust shall disburse compensation from the IPF to the investors and such compensation shall not be more than the maximum amount fixed for a single claim of an investor.
– Claim on the direction of any other authority will be routed by Sebi.
– The board of the exchanges can utilise only the interest earned on the fund, subject to approval of the trust, for investors’ awareness and education.
– The exchanges can use the interest earned on the IPF corpus for maintenance of price ticker boards.
– If National Commodity Derivatives Exchange is wound up, then unutilised money in IPF will be transferred to Sebi.
The funds will then be maintained in a separate account and Sebi shall act as trustee of these funds.