What is the Investor Protection Fund (IPF) and when is it used?
The IPF is maintained by NSE to make good investor claims, which may arise out of non-settlement of obligations by the trading member, who has been declared defaulter / expelled, in respect of trades executed on the Exchange. The IPF is utilised to settle claims of such investors where the trading member through whom the investor has dealt has been declared a defaulter or expelled by the Exchange. Payments out of the IPF may include claims arising on account of non payment of funds, credit balance by the defaulter /expelled member or non receipt of securities purchased by the investor through the trading member or non receipt of securities or fund provided as margin by the investor to the trading member, who has been declared a defaulter/expelled member. The maximum amount of claim payable from the IPF to the investor (where the TM through whom the investor has dealt is declared a defaulter) is Rs.11 lakhs.
