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SEBI: Executive Directors/Managing Directors All 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.

General Manager
Secondary Market Department
e-mail : pkb@sebi.gov.in

SMD/Policy/Cir-15/2002
June 26, 2002

The Executive Directors/Managing Directors All the Stock Exchanges
Dear Sir/Madam,

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.

Yours faithfully

P K Bindlish

Categories: SEBI
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