Secondary Market Department
e-mail : firstname.lastname@example.org
June 26, 2002
The Executive Directors/Managing Directors All the Stock Exchanges
It has come to our notice that the exchanges are not entertaining the claims against the defaulter member for compensation from the Investor Protection Fund/ Customer Protection Fund (IPF/ CPF) where the clients have dealt through the registered sub-broker of the defaulting broker.
It is brought to the notice of the exchanges that the investors who have dealt with the member broker through the registered sub-broker are also clients of member broker. Thus in case of the default of the member broker, the clients of the registered sub-brokers would also be eligible for the claims against the defaulting member broker for compensation from the IPF/CPF.
The stock exchanges are advised to take note of the above and entertain legitimate claims of the clients of the registered sub-broker of the defaulting member broker for compensation from the IPF/CPF.
P K Bindlish