Top stock exchange BSE today said investors with outstanding claims against Kassa Finvest, which was found to have misutilised client funds, can file an arbitration against the broker within 90 days and will be eligible for compensation thereafter.
The aggrieved clients would have to win the arbitration to receive the compensation from investor protection fund (IPF). The maximum compensation limit would be Rs 15 lakh per investor.
In May last year, the BSE had expelled Kassa after market regulator Sebi had found that the broker had raised funds by illegally selling the securities of its clients. It had also declared the broker as a defaulter for failure to settle the claims of the clients.
Sebi had also barred the brokerage and its top executives from capital markets following a large number of investor complaints regarding non-receipt of funds and securities worth crores of rupees.
In a statement today, BSE said "investors who have any outstanding claims against Kassa Finvest Private Ltd are advised to file arbitration reference/s with the exchange, if they so desire, within 90 days from the date of issue of exchange notice dated July 5, 2016."
"The clients filing their claims within the (90 days) period and obtaining arbitration awards in their favour against the trading member, would only be eligible for receiving compensation from the IPF.
"The claims should be filed with the nearest Regional Center of BSE, the list of which is available on exchange's website," it said.
Sebi had received 195 pending investor complaints having a claim value of about Rs 38.13 crore against the broker, as on March 11, 2015.
According to reports, investor claims against Kassa Finvest may have reached close to Rs 150 crore.
