CIRCULAR
HO/47/14/13(4)2026-MRD-POD3/ I/15577/2026 July 07, 2026
To,
All Depositories
Sir/ Madam,
Subject: Review of norms for utilization of interest or income from IPF of the
Depositories
1. Paragraph 4.46 of Section 4 of SEBI Master Circular No. SEBI/HO/MRD/MRD-
PoD-1/P/CIR/2024/168 for Depositories dated December 03, 2024, inter-alia,
prescribed the comprehensive guidelines for Investor Protection Fund (IPF) of
Depositories.
2. Paragraph 4.46.1.1(C)(i)(2) of the aforesaid Master Circular on the utilization of the
interest or income received from the investments made from the IPF prescribed
the following:
“To further strengthen the corpus, 100% of interest or income from IPF shall be
treated as corpus of IPF.”
3. Taking into account the representations received from the Depositories and in
order to bring uniformity & consistency in provisions for utilization of interest or
income from IPF across depositories and stock exchanges, the proposal was
discussed in the Secondary Market Advisory Committee of SEBI (SMAC).
4. Based on the recommendations of SMAC, comments received through public
consultation and subsequent internal deliberations, it has been decided that the
provisions under clause 4.46.1.1(B)(i)(c) and 4.46.1.1(C)(i)(2) of Section 4 of the
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above mentioned Master Circular dated December 03, 2024 for Depositories shall
stand modified as under:
4.46.1.1 B. Contribution to IPF of Depository
i. The following contributions shall be made by the Depository to the IPF:
c. At least 95% of the interest or income received every year out of any
investments made from the IPF.
4.46.1.1 C. Utilization of IPF and interest or income from IPF
i. The amount in IPF and any interest or income generated from the IPF of the
depositories shall be utilized for the purposes as stated in the table below:
SN Particulars Utilization
2 Interest or a) To further strengthen the corpus, at least 95% of
income received interest or income from IPF received every year shall
out of any be ploughed back to IPF; and
investments
made from the b) To meet expenses related to dedicated employees
IPF of IPF Trust, other administrative and statutory
expenses such as applicable taxes, audit fees and
charity commissioner’s fee, etc. during the financial
year, a maximum of 5% of interest or income from
investments of the IPF received during the financial
year may be utilized. In case the expenses exceed
the above limit, such excess expenses shall be borne
by the depository and in case of non-utilization of
such amount in the same financial year, the same
shall be ploughed back to IPF.
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5. Applicability: The provisions of the circular shall be applicable with effect from
September 01, 2026.
6. The MIIs are directed to:
6.1. take necessary steps and put in place necessary systems for the implementation
of the above;
6.2. make necessary amendments to the relevant bye-laws, rules and regulations,
wherever applicable, for the implementation of the above; and
6.3. bring the provisions of this circular to the notice of market participants (including
investors) and also disseminate the same on their website.
7. This circular is issued in exercise of the powers conferred under Section 11(1) of
the Securities and Exchange Board of India Act 1992 read with Section 26(3) of
the Depositories Act, 1996 and Regulation 97 of Securities and Exchange Board
of India (Depositories and Participants) Regulations, 2018 to protect the interests
of investors in securities and to promote the development of, and to regulate the
securities market.
8. This circular is available on SEBI website at www.sebi.gov.in.
Yours faithfully,
Hruda Ranjan Sahoo
General Manager
Tel no.: 022-26449586
Email: hrsahoo@sebi.gov.in
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