NCDEX raises compensation limit to Rs 5 lakh from investor protection fund

Agri-commodity bourse on Tuesday said it has increased the maximum compensation limit from its to Rs 5 lakh from Rs 2.5 lakh earlier with effect from February this year.

The objective of the protection fund, which is administered by way of registered Trust, is to compensate investors in the event of defaulter’s assets not being sufficient to meet the admitted claims of investors, promoting investor education, awareness and research, it said.

According to the NCDEX, earlier the maximum compensation limit payable from the fund was fixed at Rs 2.5 lakh. This has been revised upward to 5 lakh with effect from February 12, 2020.

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“Such revision is applicable in respect of all claims settled out of Trust, wherein settlement is done post the date of revision of such limits i.e. February 12, 2020,” it said.

The maximum amount of compensation available against a claim of an investor against a defaulter member would be the actual amount of claim or Rs 5 lakh whichever is less, it added.

In the event of funds of a defaulter’s member being insufficient, the Trust based on the recommendations of the relevant Committee, compensates the admitted value of claims of an investor arising out of a defaulter member subject to a compensation limit.