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SEBI Modified Investor Protection / Customer Protection Fund Guidelines

The Securities and Exchange Board of India has issued a circular dated 29th September, 2014 in continuation and in respect of the circulars issued on 16th June, 2011 w.r.t. guidelines for Investor Protection and Customer Protection Fund.

In the light of the above the SEBI has received various representations from the stock exchanges and it has been decided to modify the guidelines in which Clause 13 shall be substituted as follows:

If any eligible claim arises within three years from the date of expiry of
the specified period, such claim

1) shall be considered eligible for compensation from IPF/CPF in case
where the defaulter member™s funds are inadequate. In such cases,
IPF/CPF Trust shall satisfy itself that such claim could not have been
filed during the specified period for reasons beyond the control of the
claimant.

2) shall not be considered eligible for compensation from IPF/CPF in case
where the surplus funds of the defaulter member is returned to the
defaulter member. The same shall be borne by the stock exchange
after scrutinizing and satisfying itself that such claim could not have been filed during the specified period for reasons beyond the control of the claimant.

Provided that any claim received after three years from the date of expiry
of the specified period may be dealt with as a civil dispute.

b) Following para shall be inserted under clause 24 –

“Provided further that in cases where any litigations are pending against
the defaulter member, the residual amount, if any, may be retained by the
stock exchange until such litigations are concluded.”

In the light of the above amended provisions the exchanges are advised to make necessary amendments to the relevant bye-laws, rules and regulations.

The circular containing the full particulars can also be accessed below.

SEBI Circular on Modified Guidelines w.r.t. Investor Education & Customer Protection Fund

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