 "FMC directs commodity exchanges to increase IPF threshold")
The Forward Markets Commission (FMC) has liberalised norms related to the use of the Investor Protection Fund (IPF). The commission has directed commodity exchanges to increase the threshold limit for IPF claims.
Earlier, the ceiling in the case of a default by a member was Rs 25 lakh/member. Now, this has been raised to Rs 2 crore a member. This means if a broker-member of an exchange defaults, Rs 2 crore from the IPF can be compensated to his clients. A notification issued by FMC said the move was aimed at benefiting clients of the defaulting member to a greater degree. The compensation amount per investor/client has been raised to Rs 2 lakh.
MK Ananda Kumar, chief of corporate services at NCDEX, said, "So far, one member has been declared a defaulter on our exchange and we are finalising compensation." The case is the same for another exchange, MCX.
FMC Chairman Ramesh Abhishek said, "Taking all exchanges together, the total corpus of IPFs has increased to Rs 84 crore." Exchanges have to deposit money meant for the protection of investors to a trust.
Earlier, the ceiling in the case of a default by a member was Rs 25 lakh/member. Now, this has been raised to Rs 2 crore a member. This means if a broker-member of an exchange defaults, Rs 2 crore from the IPF can be compensated to his clients. A notification issued by FMC said the move was aimed at benefiting clients of the defaulting member to a greater degree. The compensation amount per investor/client has been raised to Rs 2 lakh.
MK Ananda Kumar, chief of corporate services at NCDEX, said, "So far, one member has been declared a defaulter on our exchange and we are finalising compensation." The case is the same for another exchange, MCX.
FMC Chairman Ramesh Abhishek said, "Taking all exchanges together, the total corpus of IPFs has increased to Rs 84 crore." Exchanges have to deposit money meant for the protection of investors to a trust.