Depositories get to spend 5% of IPF interest income

Mumbai: The Securities and Exchange Board of India (Sebi) on Tuesday revised the norms governing the use of interest earned on the Investor Protection Fund (IPF) maintained by depositories, allowing them to use up to 5% of the annual income for administrative expenses while requiring the remaining 95% to be ploughed back into the fund.

Earlier, depositories were required to add the entire interest or income earned on investments made from the IPF back to the fund's corpus.

Under the revised framework, at least 95% of the annual interest or income generated from investments made using the IPF must continue to be credited back to the fund.


The regulator said the remaining 5% may be used to meet expenses related to the functioning of the IPF Trust, including employee salaries, audit fees, applicable taxes, charity commissioner fees, and other administrative and statutory expenses. If the administrative expenses exceed the permitted 5% limit, the excess will have to be borne by the depository. Any unutilised portion of the 5% allocation at the end of the financial year must be credited back to the IPF.