New Delhi, Jan 28 () Markets regulator Sebi on Tuesday provided more clarity on norms related to composition and functioning of Investor Protection Fund (IPF) Trust with regard to stock exchanges and depositories.
Sebi said the norms for composition of IPF Trust are uniformly applicable across exchanges and depositories, while those related to functions of the trust will be applicable only to bourses.
The trust, created for the administration of the Investor Protection Fund, will have maximum 5 trustees comprising 3 public interest directors, one representative from investor associations and principal regulatory compliance officer of the market infrastructure institution (MII).
The maximum tenure of a trustee (excluding the principal regulatory compliance officer of the MII, whose trusteeship would be co-terminus with the service) will be five years or as specified by the regulator.
"Norms for composition of IPF Trust...are uniformly applicable across exchanges and depositories," Securities and Exchange Board of India (Sebi) said in a circular.
It further said the functions of IPF Trust will be applicable only to exchanges.
The trust is required to disburse the amount of compensation from IPF to the investor and such a compensation will not be more than the maximum amount fixed for a single claim of an investor.
Among other functions, it will release the compensation to the investors as and when claims have been crystallised against a defaulter member.
The trust need not wait for realisation of assets of the defaulter member for disbursements of the claims. Further, it is required to take necessary steps for disbursement of the amount at the earliest, following receipt of advice of the defaulters' committee for payment.
"Depositories shall ensure compliance with these norms within three months," Sebi noted.
In addition, the regulator has reamed some of the committees constituted by market infrastructure institutions -- stock exchange, clearing corporation and depositories.
The regulator has renamed the "investor grievance redressal committee" as "grievance redressal committee", besides, it has rechristened member selection committee as member committee. SP BAL
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