ISE has set up an Investor Protection Fund (IPF) to meet the claims of investors against defaulter Members, in accordance with the Guidelines issued by the Ministry of finance, Government of India.
ISE has established an Inter-connected Stock Exchange Investor Protection Fund Trust (ISE-IPF Trust) with the objective of compensating investors in the event of defaulters' assets not being sufficient to meet the admitted claims of investors, promoting investor education, awareness and research. The Investor Protection Fund (IPF) is administered by way of registered Trust created for the purpose. The Inter-connected Stock Exchange Investor Protection Fund Trust is managed by Trustees.
The Inter-connected Stock Exchange Investor Protection Fund Trust, based on the recommendations of the Defaulters' Committee, compensates the investors to the extent of funds found insufficient in Defaulters' account to meet the admitted value of claim, subject to a maximum limit as per decided by Trust per investor per defaulter/expelled member.
Structure of Investor Protection Fund (IPF)
Money in Investor Protection Fund (IPF) is collected by charging one percent turnover fee by the stock exchanges from the brokers or INR 25 lakh, whichever is less in the fiscal year. The stock exchanges follow the norms by SEBI to ensure that the funds in the IPF are well separated and are immune from any other liabilities. Apart from the settlement related penalties such as deliver default fine, all the other fines charged and collected by the exchanges will be a part of the Investor Protection Fund (IPF).
Compensation to Clients of Defaulter Members:
In case of Default by BSE Trading Member, BSE IPF compensates clients of such Defaulter Trading Member maximum upto Rs. 15 lakhs per client.
Monetary relief to the investors, during the course of pendency of proceedings:
BSE IPF provides monetary relief to the investors, during the course of pendency of proceedings against trading members as per the guidelines issued by SEBI. IPF has Corpus of Rs. 693 Crores as on March 31, 2018.
Policy has a critical role to play in the development of our markets. This is an ongoing process and operates in an evolutionary manner through study, discussion and debate – some of these might be behind closed doors, others in public forum.
BSE IPF works with a broad range of schools, colleges, universities, research centers, policy advisory entities, trade associations, and others. The collaboration typically is in the form of support to events, conferences, seminars, memberships, etc. IPF contributes financial resources, manpower, educational material, and other content for such events.
BSE IPF had launched focused efforts to collaborate with academia. BSE IPF is actively consulting with leading academic researchers in India and overseas to develop programmes to improve and grow the quality of research on Indian markets.
Objectives of the Investors’ Protection Fund (IPF)
1) Public Trust for the protection and benefit of the members of public who invest and deal in securities through members of BSE. Compensating these members of public in respect of their claims against Defaulter members of BSE.
2) To aid, assist subsidize, support promote and foster :
a) Research activities of the Fund, other associations, institutions and foundations engaged in research activities in the field of basic, natural and/or applied science for extension of knowledge generally and in particular pertaining to industry, commerce, trade, finance, economic, statistics, social science and sociology for the benefit of investors.
b)Preparation and publication of statistical and other information, directories, studies, brochures, pamphlets and other literature on all or any of the subjects aforesaid.
c)Facilities and arrangements including machinery and equipment necessary for carrying on the aforesaid activity.
To do all such activities for advancement of the objects of the Trust for promoting investor education, awareness and research.
IPF is Managed By:
Upto 5 Trustees comprising of
3 Public Interest Directors from BSE,
1 Representative from SEBI Registered Investors Association &
1 Chief Regulatory officer of BSE
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