The Securities and Exchange Board of India has revised the rules on how depositories may use interest or income generated from investments of their Investor Protection Fund. Instead of requiring 100 percent of that income to be added back to the fund corpus, the revised framework requires at least 95 percent to be ploughed back, while permitting up to 5 percent to be used during the financial year for specified administrative and statutory expenses. The permitted 5 percent cap covers expenses related to dedicated employees of the IPF Trust and other administrative and statutory costs, including applicable taxes, audit fees and charity commissioner fees. If those expenses exceed the cap, the excess must be borne by the depository. Any portion of the permitted amount that is not used in the same financial year must also be returned to the IPF. SEBI said the change follows representations from depositories and is intended to bring greater uniformity and consistency with the treatment of IPF income across depositories and stock exchanges. The revised provisions take effect on September 1, 2026. Depositories are required to put in place the necessary systems, amend relevant bye-laws, rules and regulations where needed, and notify market participants including investors through their websites.
Securities & Exchange Board of India2026-07-07
Securities and Exchange Board of India allows depositories to use up to 5 percent of IPF investment income for administrative expenses
The Securities and Exchange Board of India has changed depository Investor Protection Fund rules so that at least 95 percent, rather than 100 percent, of annual IPF investment income must be added back to the fund. Up to 5 percent may be used for specified IPF Trust administrative and statutory expenses, with any excess paid by the depository and any unused amount returned to the IPF. The changes apply from September 1, 2026.