TaxTMI 
TaxTMI 
Comprehensive guidelines for Investor Protection Fund (IPF) and Investor Services Fund (ISF) for Stock Exchanges having commodity derivatives segment
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....tion Fund and Investor Services Fund at Stock Exchanges and Depositories (excluding Commodity Derivatives Exchanges) with inclusion of new provisions. Further, representations were received from market participants with respect to propositions on Ease of Doing Business in commodity derivatives segment. Considering these developments, the IPF and ISF guidelines for commodity derivatives segment are being revised. 2. After due consultation with the stock exchanges, the new requirements have been framed as placed in Annexure 1 to the Circular. 3. The Circular shall come into force from June 01, 2024. 4. The Exchanges are advised to: 4.1. take steps to make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the same, 4.2. bring the provisions of this circular to the notice of the members of the Exchange and also to disseminate the same on their website, 4.3. communicate to SEBI, the status of the implementation of the provisions of this Circular. 5. This Circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in ....
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....iting legitimate claims against a defaulter-trading member, shall not be less than one year from the date of declaration of default. 3.3. The stock exchange shall publish the notice in following newspapers: 3.3.1. all editions of at least one English national daily with wide circulation; 3.3.2. at least one regional language daily with wide circulation, in regional language, based on the maximum concentration of the clients of defaulter trading member from a particular region or state. 3.4. In addition to the public notice, the stock exchange shall send SMS and/or e-mails to all clients of the defaulter-trading member, informing them about the default of trading member and inviting claims in this regard. 3.5. The public notice calling for claims shall be displayed on website of stock exchange as well as on premises of stock exchange/s (including Investor Service Centers) for the entire specified period. 3.6. The public notice shall contain details of specified period, maximum compensation limit for a single claim of an investor, supporting documents required for filing claim and all other relevant information in this regard. 4. Eligibility of Claims: 4.1. Th....
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....ines for declaration of default of a trading member, processing of investor claims out of IPF and review of claim is placed at Annexure 2. 7. Disbursements of claims from the IPF: 7.1. The IPF Trust shall disburse the amount of compensation from IPF to the investors and such compensation shall not be more than the maximum amount fixed for a single claim of an investor. 7.2. The compensation shall be disbursed to the investor from IPF in case there is a shortage of defaulter trading member assets after its realization, subject to the maximum amount fixed for a single claim of an investor. 7.3. The IPF Trust need not wait for realization of assets of the defaulter-trading member for disbursements of the claims. Upon receipt of recommendation from MCSGFC committee, for payment, the IPF Trust shall take necessary steps for disbursement of amount at the earliest. However, upon realisation of assets of the defaulter-trading member, the aforementioned amount so disbursed from IPF, shall be credited back to IPF. 7.4. The stock exchange would do away with the practice of obtaining indemnity undertaking from the clients. 7.5. Any amount realized from assets of defaulter tra....
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....focused content on social media platforms and media sharing platforms like Facebook, Twitter, Youtube, Instagram, LinkedIn etc. 10.1.3. Radio and TV advertisements; 10.1.4. investor-education focused mobile application (not more than one mobile application may be launched by a stock exchange); 10.1.5. Kiosks in trade fair, book fair etc. 10.1.6. Price dissemination through SMS/Electronic Communication facility 10.2. Capital expenditure of ISC: Capital expenditure would be permissible w.r.t. setting up of Investor Service Centre (ISC) However, no expenditure incurred on product promotion, shall be utilised from IPF / interest / income of IPF, in any manner. 10.3. Research activities: 10.3.1. The stock exchanges shall be permitted to utilize IPF interest income for undertaking research activities related to commodities market, provided every such activity / project is undertaken only after obtaining prior written approval of the trustees of the IPF Trust. Such research may also be undertaken on commodities / goods which are not notified under Section 2(bc) of SCRA, 1956. 10.3.2. The trustees of IPF Trust would, inter alia, consider and record the reasons, rele....
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....fixed by them per investor. 12.4. To frame FAQs on their policy on processing investor claims for easy understanding of investors. 12.5. Give adequate notice (including a press release) to the investors before implementing any amendment in the policy on processing of claims. In case of any amendment in the policy on processing of investor claims, the same should not be applicable to the trading members who have been disabled or suspended or declared defaulter or expelled by the exchange prior to the effective date of implementation of the policy. 13. Miscellaneous 13.1. In case the stock exchange is wound up, derecognised, or exits, then the balance amount in the IPF and / or ISF, shall be transferred to Investor Protection and Education Fund of SEBI in terms of SEBI (Investor Protection and Education Fund) Regulations, 2009. B. Guidelines for Investor Services Fund (ISF) 1. The Stock Exchanges are mandated to set up Investor Service Fund (ISF). 2. In order to have efficient management of ISF, Regulatory Oversight Committee (ROC) of the stock exchange shall oversee the contribution to ISF and its utilization. 3. The stock exchange shall maintain separate ban....
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....ties such as telephone, photocopier, printer, scanner, furniture etc. 7.6. A library having information/documents shall be maintained both in physical and electronic form, on the following subjects for the benefit of investors: 7.6.1. Relevant Acts & Rules; 7.6.2. Regulations, Circulars or Master Circulars, Guidelines, etc. issued by SEBI; 7.6.3. Rules, Bye-laws, Regulations, Circulars and Master circulars issued by stock exchanges and clearing corporations; 7.6.4. Educational material on various areas of commodity derivatives markets including published commodity related materials of the stock exchanges etc.; 7.6.5. Brochures detailing the rights and obligation of investors while dealing with brokers in commodity markets; 7.6.6. FAQ's to disseminate clarity on various terms, process etc. in commodity derivatives segment. In case of receipt of specific request for physical copies of the said documents, the same shall be provided at a minimal cost, else priority may be given to sharing of such information electronically. 7.7. A database of visitors (including investors) for future correspondence, whenever required. 7.8. Dummy terminals to display th....
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....ith the exchange such as PAN, address, e-mail ID, mobile no, etc. The information w.r.t. funds and securities balances to be provided to the client would be provisional as it would be without verification about its correctness/ completeness. The exchange may mention that the claims would be processed as per the provisions of SEBI Circulars and Regulations and as per Rules, Regulations & Bye-laws of the stock exchange. The stock exchange can send the pre-filled claim forms to the clients on their registered e-mail IDs, if available with the exchange. The stock exchange shall provide physical copies of the claim forms on request of the investor. T+15 days 4 Submission of claim forms by the client of defaulting trading member The client would be required to fill claim forms either online or offline, by making necessary changes in the pre-filled claim form and providing additional details. Supporting documents such as relevant bank statements, demat statements, client ledger, etc. needs to be provided along with the claim form. The client should provide the bank account details for disbursal of the amount at thi....
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....of the claims. After processing of the claims by the exchange, the claims would be routed to the auditors to assess the veracity and genuineness of the claims including admissibility of the claim. After processing, auditing of the claims and declaration of the trading member as defaulter, the claims shall be placed before Member and Core Settlement Guarantee Funds Committee (MCSGFC) for approval. In case the assets of the defaulter and / or expelled trading member are insufficient to meet the admitted amount, the MCSGFC would recommend payment of investor claims to the Trustees of the Investor Protection Fund Trust (IPFT) for payment out of the Investor Protection Fund (IPF). The IPFT to approve the payment of the eligible claim amount to the client from the IPF. The exchange will communicate the decision on claims to the clients post approval by the IPFT. All claims received within the timeline mentioned at point-4, if approved by the IPFT, shall be settled within T+135 days. All claims received after the timeline mentioned at point-4 above but before the declaration of the trading member as defaulter, if appr....