The Multi-Commodity Exchange of India Limited (MCX) on April 27, 2026, issued the Master Circular – Investor Protection Fund/Investor Service Fund.
The following has been stated:
• It has issued a consolidated Master Circular on Investor Protection Fund (IPF) and Investor Services Fund (ISF) in line with Securities and Exchange Board of India guidelines, replacing earlier circulars and bringing all applicable provisions as of March 31, 2026, into a single framework. The circular outlines the constitution and management of IPF through a dedicated trust, sources of funding (including turnover fees, penalties, and investment income), and its primary objective of compensating investors in case of default by trading members.
• It prescribes detailed procedures for inviting, processing, and settling investor claims, including eligibility conditions, timelines, compensation limits, and dispute resolution mechanisms, while ensuring transparency through disclosures and periodic reviews of fund adequacy.
• The circular also provides norms for prudent investment and utilization of IPF funds, including investor education, awareness programs, research activities, and administrative expenses, with strict safeguards on usage.
• Further, the ISF framework focuses on investor awareness and service delivery, mandating separate fund management, contributions by exchanges, and utilization for education programs, infrastructure like Investor Service Centres (ISCs), complaint handling, and dissemination of market information.
• The circular emphasizes segregation of funds, governance oversight, timely disbursal of claims, and enhanced investor protection measures, thereby strengthening market integrity, investor confidence, and efficient grievance redressal mechanisms in the commodity derivatives market.
[Notification no. - MCX/IPF/236/2026]
