Commodity exchanges have to compulsorily set up investor protection and service funds, Sebi said on Tuesday.
Coming out with comprehensive guidelines, the markets regulator said commodity derivatives exchanges have to set up Investor Service Fund (ISF) for providing minimum facilities at various investor service centres.
Sebi said the Investor Protection Fund (IPF) of an exchange should have a maximum of five trustees.
Out of the five, three should be public interest directors and a representative from Sebi-recognised any investor association. Besides, the exchange's compliance officer will be part of the trust.
"All the penalties levied and collected by the exchange, except for the settlement related penalties (including penalties from delivery default), shall be credited to the IPF," the regulator said.
However, the amount of compensation available against a single claim of an investor arising out of defaulter by a member broker should be at least Rs 1 lakh.
While the bourses can utilise the income earned on the IPF corpus towards promotion of investor education and awareness programmes, the supervision of utilisation of interest on IPF will be with the trust.
With respect to ISF, the regulator said at the initial stage, the exchange should contribute at least Rs 10 lakh towards the fund. Later, the bourse should transfer one per cent of the turnover fees charged from its members on monthly basis towards ISF.
The exchanges are required to maintain separate bank accounts for maintaining corpus of the IPF as well as the ISF.
Any investor claim arising out of a default of a broker/ member of the bourse will be eligible for compensation from IPF.
In case, there is a shortage of fund after realisation of the defaulter brokers' assets, then money will be disbursed from the IPF to compensate the affected investors.
As per Sebi, the amount realised from the assets of the defaulter member should be returned after satisfying the claims of the exchanges.
"... In cases where any litigations are pending against the defaulter member, the residual amount, if any, may be retained by the exchange until such litigations are concluded," it noted.
To create more awareness among the investors, the investor service centres, set up by the bourses, will have to set up dummy terminals to display prices of commodities on real time basis.
The investor service centre will also have facilities for recording investor complaints as well as provide counselling services.