Comprehensive guidelines for Investor Protection Fund/Customer Protection Fund at Stock Exchanges

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he Stock Exchanges. It was contemplated to create a compensation fund to take care of the legitimate investment claims which are not of speculative nature of the clients of a defaulting member. It was proposed that the claim of each non member may be limited to a maximum amount of Rs. 10,000/-. SEBI vide circular No. SMD/RCG/PJ/268/96 dated January 19, 1996, advised, inter-alia, the Stock Exchanges to increase the compensation available against a single claim of an investor against the defaulter member broker to Rs. 1,00,000/- in case of major Stock Exchanges, Rs. 25,000/- in case of smaller Stock Exchanges viz., Guwahati, Bhubaneshwar, Magadh and Madhya Pradesh and Rs. 50,000/- in case of other Stock Exchanges. 2. During the course of t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....curities and to promote the development of, and to regulate the securities market. Yours faithfully, V S SUNDARESAN Annexure Comprehensive guidelines for Investor Protection Fund (IPF) / Customer Protection Fund (CPF) at Stock Exchanges Constitution and Management of the IPF/CPF 1. The Investor Protection Fund/Customer Protection Fund (hereinafter referred to as IPF/CPF) shall be administered by way of a Trust created for the purpose. 2. The IPF/CPF Trust shall consist of atleast one public representative, one representative from the registered investor associations recognized by SEBI and the Executive Directors/Managing Directors/Administrators of the Stock Exchange. 3. The Stock Exchange shall provide the secretari....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....mants to file claims against the defaulter member brokers within a specified period of time, called as the "specified period". 8. The specified period shall not be less than one month or twenty five working days, whichever is more. 9. The Stock Exchange shall publish the notice in all the editions of atleast one English national daily with wide circulation and in atleast one regional language daily with wide circulation at the place where the Stock Exchange is situated. 10. The notice calling for claims shall also be displayed on the premises of the Stock Exchange as well as on the web-sites of the Stock Exchange for the entire specified period. 11. The notice shall contain the specified period, the maximum compensation limit fo....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ess than Rs. 1 lakh in case of major Stock Exchanges viz., BSE and NSE, and Rs. 50,000/- in case of other Stock Exchanges. 19. The Stock Exchange, in consultation with the IPF/CPF Trust, shall review and progressively increase the amount of compensation available against a single claim from an investor, atleast every three years. 20. The Stock Exchange shall disseminate the compensation limit fixed by them and any change thereof, to the public through a Press Release and also through its web site. Disbursements of claims from the IPF/CPF 21. The IPF/CPF Trust shall disburse the amount of compensation from the IPF/CPF to the investor and such a compensation shall not be more than the maximum amount fixed for a single claim of an ....