Investor Protection Fund (IPF) of Depositories
Summary
This circular mandates depositories to establish and maintain an Investor Protection Fund (IPF) in compliance with SEBI regulations. It outlines specific guidelines for the utilization, constitution, contribution, and investment of IPF funds. Additionally, it requires depositories to submit internal usage guidelines to SEBI and implement these provisions within three months.
Text
SEBI (Depositories and Participants) Regulations were amended mandating the depositories to credit five per cent or such percentage as may be specified by the Board, of its profits from depository operations every year to the IPF.
The IPF may be utilized for promotion of investor education, research activities, supporting initiatives of Depository Participants for investor awareness, or any other manner prescribed/ permitted by SEBI.
Depositories shall frame their internal guidelines on utilisation of the funds... and post approval of their board, submit the same to SEBI within 30 days from the date of this circular.
The IPF Trust shall consist of atleast one Public Interest Director (PID) of the depository, one person of eminence from an academic institution from the field of finance / an expert in the field of investor education / a representative from the registered investor associations recognized by SEBI and Managing Director of the Depository.
The Depository shall provide the secretariat for the IPF Trust.
The Depository shall ensure that the funds in the IPF are kept in a separate account designated for this purpose and that the IPF is immune from any liabilities of the Depository.
5% of their profits from Depository operations every year. The depositories shall transfer the amount with effect from the Financial Year 2012-13...
All fines and penalties recovered from Depository Participants and other users including Clearing Member pool account penalty...
Interest or Income received out of any investments made from the IPF.
Funds lying to the credit of IPR (Investor Protection Reserve) / BOPF (Beneficial Owners Protection Fund) of the Depository or any other such fund / reserve of the Depository shall be transferred to IPF.
Funds of the Trust shall be invested in instruments such as Central Government securities, fixed deposits of scheduled banks and any such instruments which are allowed as per the investment policy approved by the Board of the Depository.
The balance available in the IPF as at the end of the month and the amount utilised during the month including the manner of utilization shall be reported in the Monthly Development Report of the Depository.
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Source: SecMarx — Investor Protection Fund (IPF) of Depositories. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.