Sebi Proposes Changes to IPF Fund Usage for Depositories

Sebi has proposed that depositories be allowed to use up to 5% of income from the Investor Protection Fund for administrative expenses. This aligns with similar rules for stock exchanges. Depositories currently fund these expenses from their income. Public comments on this proposal are invited until June 1.

Sebi, India's securities market regulator, has suggested that depositories be permitted to utilize up to 5% of the income generated from the Investor Protection Fund (IPF) for administrative purposes. This proposed change aims to align the framework for depositories with the existing rules applicable to stock exchanges.

Under the present regulations, stock exchanges can use up to 5% of the income from the IPF investments to cover various administrative expenses, including staffing costs and audit fees. However, depositories currently bear these costs from their own operational income.

The new proposal allows depositories to use the IPF to meet these expenses, provided they don't exceed the 5% cap. Sebi has invited public feedback on this proposal, with a deadline set for June 1. As of March 31, 2026, the IPF corpus stood at Rs 87.78 crore for National Securities Depository Ltd and Rs 95.18 crore for Central Depository Services Ltd.