9911796707
TMI BlogComprehensive guidelines for Investor Protection Fund (IPF) and Investor Services Fund (ISF) for Stock Exchanges having commodity derivatives segmentX X X X Extracts X X X X X X X X Extracts X X X X ..... xchanges and Depositories (excluding Commodity Derivatives Exchanges) with inclusion of new provisions. Further, representations were received from market participants with respect to propositions on Ease of Doing Business in commodity derivatives segment. Considering these developments, the IPF and ISF guidelines for commodity derivatives segment are being revised. 2. After due consultation with the stock exchanges, the new requirements have been framed as placed in Annexure 1 to the Circular. 3. The Circular shall come into force from June 01, 2024. 4. The Exchanges are advised to: 4.1. take steps to make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the same, 4.2. bring the provisions of this circular to the notice of the members of the Exchange and also to disseminate the same on their website, 4.3. communicate to SEBI, the status of the implementation of the provisions of this Circular. 5. This Circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 , to protect the interests of investors in securities and to promote the development of, and to regulate the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange shall publish the notice in following newspapers: 3.3.1. all editions of at least one English national daily with wide circulation; 3.3.2. at least one regional language daily with wide circulation, in regional language, based on the maximum concentration of the clients of defaulter trading member from a particular region or state. 3.4. In addition to the public notice, the stock exchange shall send SMS and/or e-mails to all clients of the defaulter-trading member, informing them about the default of trading member and inviting claims in this regard. 3.5. The public notice calling for claims shall be displayed on website of stock exchange as well as on premises of stock exchange/s (including Investor Service Centers) for the entire specified period. 3.6. The public notice shall contain details of specified period, maximum compensation limit for a single claim of an investor, supporting documents required for filing claim and all other relevant information in this regard. 4. Eligibility of Claims: 4.1. The claims received against the defaulter-trading member during the specified period shall be eligible for consideration for compensation from IPF. 4.2. If any eligible claim ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of compensation from IPF to the investors and such compensation shall not be more than the maximum amount fixed for a single claim of an investor. 7.2. The compensation shall be disbursed to the investor from IPF in case there is a shortage of defaulter trading member assets after its realization, subject to the maximum amount fixed for a single claim of an investor. 7.3. The IPF Trust need not wait for realization of assets of the defaulter-trading member for disbursements of the claims. Upon receipt of recommendation from MCSGFC committee, for payment, the IPF Trust shall take necessary steps for disbursement of amount at the earliest. However, upon realisation of assets of the defaulter-trading member, the aforementioned amount so disbursed from IPF, shall be credited back to IPF. 7.4. The stock exchange would do away with the practice of obtaining indemnity undertaking from the clients. 7.5. Any amount realized from assets of defaulter trading member and not yet paid to investors / claimed by investors, shall be kept in a separate interest bearing account, for a period of three years after expiry of specified period. In case these funds remain unclaimed for three ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... launched by a stock exchange); 10.1.5. Kiosks in trade fair, book fair etc. 10.1.6. Price dissemination through SMS/Electronic Communication facility 10.2. Capital expenditure of ISC: Capital expenditure would be permissible w.r.t. setting up of Investor Service Centre (ISC) However, no expenditure incurred on product promotion, shall be utilised from IPF / interest / income of IPF, in any manner. 10.3 . Research activities: 10.3.1. The stock exchanges shall be permitted to utilize IPF interest income for undertaking research activities related to commodities market, provided every such activity / project is undertaken only after obtaining prior written approval of the trustees of the IPF Trust. Such research may also be undertaken on commodities / goods which are not notified under Section 2(bc) of SCRA, 1956. 10.3.2. The trustees of IPF Trust would, inter alia, consider and record the reasons, relevance and stated objectives of the research activity / project while according approval. Further, the Board of the stock exchange shall be apprised of the research programs / activities being undertaken at least once in half year of a given financial year. 10.3.3. The amount apportioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing of investor claims, the same should not be applicable to the trading members who have been disabled or suspended or declared defaulter or expelled by the exchange prior to the effective date of implementation of the policy. 13. Miscellaneous 13.1. In case the stock exchange is wound up, derecognised, or exits, then the balance amount in the IPF and / or ISF, shall be transferred to Investor Protection and Education Fund of SEBI in terms of SEBI (Investor Protection and Education Fund) Regulations, 2009. B. Guidelines for Investor Services Fund (ISF) 1. The Stock Exchanges are mandated to set up Investor Service Fund (ISF). 2. In order to have efficient management of ISF, Regulatory Oversight Committee (ROC) of the stock exchange shall oversee the contribution to ISF and its utilization. 3. The stock exchange shall maintain separate bank account for maintaining corpus of the ISF and such funds should not be co-mingled with any other fund(s) of the stock exchange and shall not be used for any purpose except for those permitted in this Circular. 4. Pending utilisation of funds of ISF, stock exchanges shall be permitted to deploy such funds in fixed deposits of scheduled banks an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aster circulars issued by stock exchanges and clearing corporations; 7.6.4. Educational material on various areas of commodity derivatives markets including published commodity related materials of the stock exchanges etc.; 7.6.5. Brochures detailing the rights and obligation of investors while dealing with brokers in commodity markets; 7.6.6. FAQ's to disseminate clarity on various terms, process etc. in commodity derivatives segment. In case of receipt of specific request for physical copies of the said documents, the same shall be provided at a minimal cost, else priority may be given to sharing of such information electronically. 7.7. A database of visitors (including investors) for future correspondence, whenever required. 7.8. Dummy terminals to display the prices of the commodities listed on the exchange on real-time basis, to enable investors watch the price movements of the commodities. 7.9. To conduct various investor education and investor awareness programs through seminars, lectures, workshops, publications (print and electronic media), training programs etc. aimed at enhancing securities market literacy and promoting participation in the commodity derivatives mark ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... physical copies of the claim forms on request of the investor. T+15 days 4 Submission of claim forms by the client of defaulting trading member The client would be required to fill claim forms either online or offline, by making necessary changes in the pre-filled claim form and providing additional details. Supporting documents such as relevant bank statements, demat statements, client ledger, etc. needs to be provided along with the claim form. The client should provide the bank account details for disbursal of the amount at this stage itself in case the claim is admitted. The stock exchange may seek additional documents, if required, on case to case basis. T+75 days 5 Declaration of default of the trading member The stock exchange will declare the trading member a defaulter after completing the due process for declaring a trading member as a defaulter. Extension of timeline beyond T+120 days, if any, for declaration of default of the trading member would be subject to approval of SEBI. T+120 days 6 Intimation to investors about declaration of trading member as a defaulter The stock exchange shall issue the Public Notice on default of the trading member immediately on their webs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ost approval by the IPFT. All claims received within the timeline mentioned at point-4, if approved by the IPFT, shall be settled within T+135 days. All claims received after the timeline mentioned at point-4 above but before the declaration of the trading member as defaulter, if approved by the IPFT, shall be settled within 60 days from the date of such declaration. All claims received on or after the date of declaration of the trading member as defaulter, if approved by the IPFT, shall be settled within 60 days from the date of receipt of such claims. 8 Request for review of the claim from the client (First Review) In case the client is not satisfied with the processing of his claim, the client can file a review with the Member and Core Settlement Guarantee Fund Committee (MCSGFC) (first review). Within 90 days of receipt of intimation of the decision of the IPFT from the stock exchange. The MCSGFC will review the claim and inform the same to the client. Within 60 days of receipt of review application 9 Request for review of the claim from the client (Second Review) In case the client is still not satisfied with the first review by the MCSGFC, the client can file the second revie ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
