Mumbai, November 18, 2020 (GPN): In order to enhance the effectiveness of the Investor Protection Fund (IPF) and to improve the investor experience while making claims against defaulting Trading Members, SEBI has advised Exchange to operationalize a detailed Standard Operating Procedure (SOP). The SOP inter alia covers procedures and timelines for obtaining information from investors, processing investor claims, review of claims and timeline for declaration of a Trading Member as a defaulter. The SOP strengthens existing processes and includes electronic claim submission, pre-filled forms with information as available with the Exchange, claim processing policy, review by independent auditors etc. The SOP is being operationalized to significantly reduce the timelines for making payments to the investors in case of Trading Member defaults.

A detailed policy for evaluating investor claims is available on NSE website. All eligible investor claims of a defaulting trading member will be paid as per the policy without any aggregate limit per trading member subject to a maximum of Rs. 25 lakhs per client. 

SEBI has also advised NSE to increase the size of its IPF corpus to Rs. 1,500 crores in order to protect the interests of investors in light of the recent broker defaults. The adequacy of the IPF corpus will be reviewed on a half yearly basis and incremental contributions will be made to the IPF, if required. 

NSE is focused and committed to further strengthening investor protection through a variety of measures including focused investor education, enhanced broker supervision and surveillance in view of the recent defaults of Trading Members. ENDS

Investor Protection Fund Trust

NSE has established an Investor Protection Fund 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 is administered by way of registered Trust created for the purpose. The Investor Protection Fund Trust is managed by Trustees comprising of Public representative, investor association representative, Board Members and Senior officials of the Exchange.

The Investor Protection Fund Trust, based on the recommendations of the Member and Core Settlement Guarantee Fund Committee (formerly 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 of ₹ 25 lakhs per investor per defaulter/expelled member in respect of claims arising on expulsion/declaration of default of members and subject to an overall limit per defaulter / expelled member.

Trustees of Investor Protection Fund Trust

• Ms. Anuradha Rao, Trustee
• Mr. Girish Chandra Chaturvedi, Trustee
• Mr. K Narasimha Murthy, Trustee
• Mr. Surinder Verma, Trustee
• Ms. Priya Subbaraman, Trustee

IPFT Corpus

FINANCIAL YEAR	CLAIMS PAID/PROVIDED (IN RS. CRORES)	CLOSING IPFT CORPUS (IN RS. CRORES)
2015-16	15.83	548.92
2016-17	17.84	579.76
2017-18	13.57	644.46
2018-19	106.21	619.37
2019-20	69.03	590.48
2020-21*	61.68	564.42

* Unaudited and provisional as on September 30, 2020

Note : NSE would transfer the requisite amount to enhance the total corpus to Rs.1200 crores by November 26,2020. Further, an additional amount of Rs.300 crores will be maintained as a reserve fund to be transferred to IPFT to meet any shortfall in IPF.

About National Stock Exchange of India Limited (NSE):

National Stock Exchange of India Ltd. (NSE) is the world’s largest derivatives exchange by trading volume as per the statistics published by Futures Industry Association (FIA) for 2019. NSE is also ranked 3rd in the world in the cash equities segment by number of trades as per the statistics published by the World Federation of Exchanges (WFE). NSE was the first exchange in India to implement electronic or screen-based trading. It began operations in 1994 and is ranked as the largest stock exchange in India in terms of total and average daily turnover for equity shares every year since 1995, based on SEBI data. NSE has a fully-integrated business model comprising exchange listings, trading services, clearing and settlement services, indices, market data feeds, technology solutions and financial education offerings. NSE also oversees compliance by trading and clearing members with the rules and regulations of the exchange. NSE is a pioneer in technology and ensures the reliability and performance of its systems through a culture of innovation and investment in technology. NSE believes that the scale and breadth of its products and services, sustained leadership positions across multiple asset classes in India and globally enable it to be highly reactive to market demands and changes and deliver innovation in both trading and non-trading businesses to provide high-quality data and services to market participants and clients.