As per the earlier rules, such amounts used to be credited to the IPF/Customer Protection Fund (CPF).
In a circular, Securities & exchange Board of India said stock exchanges have sought exemption from strict compliance of the earlier rules “on the ground that the residual amount remaining after satisfaction of claims against the defaulting broker should be refunded to the broker and not credited to the IPF/CPF”. Accordingly, the market regulator had modified the guidelines.
In case the concerned broker has membership of multiple stock exchanges, then the amount realised from the assets only after satisfying eligible claims of all the stock exchanges and the Sebi. Besides, Sebi said the compensation shall be disbursed to the affected investor from the IPF/CPF in case there is a shortage of the defaulter broker’s assets after its realisation.
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