Sebi has relaxed norms on how depositories can use income earned from their Investor Protection Fund, allowing them to spend a small part of the annual income on administrative and statutory expenses. The regulator said that at least 95% of the interest or income earned every year from investments made out of the Investor Protection Fund must be added back to the fund. The remaining amount, capped at 5%, can be used to meet expenses linked to the fund’s operations. The new norms will come into effect from September 1, 2026.
The change modifies the earlier rule under SEBI’s master circular for depositories, which required 100% of the interest or income earned from the Investor Protection Fund to be treated as part of the fund corpus. SEBI said it reviewed the rule after receiving representations from depositories and to bring consistency between the rules for depositories and stock exchanges.
