The Securities and Exchange Board of India on 22nd October 2021, in order to align with the practices in the securities market, based on the internal deliberations/discussions, and the feedback received from the Stock Exchanges, the SEBI has decided to modify the clause pertaining to the determination of legitimate claims which shall be effective from 1st January 2022.
The Stock Exchanges shall ensure that once a member has been declared defaulter, the claim (s) shall be placed before the Member Core Settlement Guarantee Fund Committee (MCSGFC, the erstwhile Defaulters’ Committee) for sanction and ratification. MCSGFC’s advice w.r.t. legitimate claims shall be sent to the IPF Trust for disbursement of the amount immediately.
In case the claim amount is more than the coverage limit under IPF or the amount sanctioned and ratified by the MCSGFC is less than the claim amount then the investor will be at liberty to prefer for arbitration outside the exchange mechanism / any other legal forum outside the exchange mechanism for claim of the balance amount.
