Investor Protection Fund (IPF) and its related matters
Summary
This circular consolidates and updates norms for the Investor Protection Fund (IPF) applicable to National Commodity Derivatives Exchanges. It mandates the constitution of an IPF Trust, specifies funding sources including penalties and turnover fees, and outlines procedures for filing and determining investor claims. The document establishes compensation thresholds, disbursement rules, and transition provisions effective from September 29, 2016.
Text
Rules made by the erstwhile FMC continue in force for one year from FCRA repeal or till SEBI notification.
This circular consolidates and updates norms and guidelines for IPF applicable to all National Commodity Derivatives Exchanges.
The IPF shall be administered by a Trust created for this purpose.
The IPF Trust shall comprise two eminent persons, one independent Director, and the MD/CEO of the Exchange.
Sitting fee payable to Trustees must be fixed with prior approval of SEBI.
Exchanges shall provide the secretariat for the IPF Trust/Committee.
Exchanges shall ensure IPF funds are segregated from Exchange funds and immune from Exchange liabilities.
Exchanges shall disclose IPF trust as a related party and transaction details per Accounting Standard AS-18.
All penalties except settlement-related ones go to IPF after deducting administration costs not exceeding 10 percent.
1% of turnover fee or Rs 25 lakh, whichever is lower, shall go to IPF annually.
Exchange shall publish a notice inviting legitimate claimants to file claims within a specified period.
The specified period for filing claims shall be a minimum of 90 days.
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Source: SecMarx — Investor Protection Fund (IPF) and its related matters. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.