SEBI OKs depositories using 5% investor protection fund income for expenses
This story was originally published at 19:13 IST on 7 July 2026
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MUMBAI – The Securities and Exchanges Board of India has allowed depositories to use a small part of the interest or income made from investments by their investor protection fund to meet expenses of operating the fund. From September onwards, the move will allow depositories to use 5% of total interest and income from investments of the fund to meet its operational expenses.
The regulator issued a circular Tuesday amending a 2024 master circular pertaining to depositories. Depositories will be required to plough back 95% of total interest or income from investments of their investor protection fund to further strengthen its corpus. The current requirement is 100%.
As per the circular, depositories can earmark 5% of the interest and income from investment in the investor protection fund for expenses related to dedicated employees of the investor protection funds and other administrative and statutory expenses. The depositories may use the earmarked funds for expenses such as taxes, audit fees, and charity commissioner's fee.
Any expenses in addition to 5% of the interest or income from investment of the investor protection fund shall be borne by the depositories, SEBI said in its circular. Any unutilised remainder from the interest or income set aside for expenses shall be ploughed back to the corpus of the fund, according to SEBI. End
Reported by Prateem Rohanekar
Edited by Deepshikha Bhardwaj
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