MCX raises compensation limit to Rs25 lakh from IPF

Leading bourse MCX today raised the maximum compensation limit to Rs 25 lakh from the existing Rs 2 lakh payable to investor from the Investor Protection Fund (IPF) in the event of default of a member.
The exchange maintains the MCX Investor (Client) Protection Fund (MCX-IPF) to compensate investors in the event of defaulters' assets not being sufficient to meet the legitimate claims of investors.
Presently, Rs 2 lakh is the maximum compensation available from MCX-IPF against a single claim of an investor arising out of default of a member of the exchange besides the maximum compensation of Rs 2 crore per defaulter.

"The exchange in consultation with IPF Trust has reviewed the present limits of compensation and decided to revise...," MCX said in a regulatory filing.
The maximum compensation made available against a single claim of an investor has been enhanced to Rs 25 lakh from the current Rs 2 lakh, it said.
Also, the restriction in the form of maximum available compensation of Rs 2 crore payable against the claims of all investors against a defaulter, has been removed.

"The above revisions are applicable to only the claims arising from clients of SEBI-registered members where the declaration of default of such members is on or after January 24, 2018," the MCX said.

However, the pre-revision maximum amount of compensation available will also continue to be applicable upon all claims against members where the declaration of default of member is prior to January 24 in case of non-SEBI registered members, it added.
MCX is the leading commodity bourse that offers derivative trading in commodities.