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14
June 2017
Securities
markets regulator SEBI on Tuesday mandated commodity exchanges to set up
investor protection fund (IPF) and investor service fund (ISF) from July 1.
"The
investor claim arising out of a default of a broker/member of the exchange
shall be eligible for compensation from IPF," SEBI said in a circular.
"In
case of claims against a defaulter member, the claims of the claimant shall be
placed before the defaulters' committee for sanction and ratification. The
defaulters' committee's advice with respect to legitimate claims shall be sent
to IPF Trust for disbursement of the amount."
According
to the securities markets regulator, the IPF Trust of the commodity exchanges
shall have a maximum of five trustees. The
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"All
the penalties levied and collected by the exchange, except for the settlement
related penalties (including penalties from delivery default), shall be
credited of the IPF. One per cent of the turnover fee charged by the exchange
from its members/brokers or Rs 10 lakh which ever is higher in a financial
year," the circular said. The
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The
circular pointed out that if any claim arises within three years from the date
of expiry of the specified period, such claim shall be considered eligible for
compensation from IPF.
"The
exchanges are free to fix suitable compensation limits, in consultation with
IPF trust. However, the amount of compensation available against a single claim
of an investor arising out of defaulter by a member broker shall not be less
than Rs 1 lakh," the circular read.
"The
compensation shall be disbursed to the investor from the IPF in case there is a
shortage of defaulter broker's assets after its realization." The Total Investment & Insurance
Solutions
Besides,
SEBI mandated commodity exchanges to set up ISF for providing basic minimum facilities
at various Investor Service Centres (ISC). The Total Investment & Insurance Solutions
"At
initial stage, the exchange shall contribute a minimum of Rs 10 lakh towards
setting up of ISF," the circular added. The Total Investment & Insurance Solutions
"Subsequently,
onwards, the exchanges shall transfer the one per cent of the turnover fees
charged by the exchange from its members on monthly basis towards ISF within
seven days of the end of the month, subject to minimum of Rs 10 lakh in a
financial year."
"The
exchange shall also plough back the entire income earned on the corpus of ISF
to the ISF within one month from the end of September and March of each
year."The Total Investment &
Insurance Solutions
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