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