SEBI has came out with exhaustive guidelines for Investor Protection Fund (IPF) and Investor Services Fund (ISF) maintained by stock exchanges and depositories.In respect to contribution to IPF of depositories, that they have to contribute ______ of their profits from depository operations every year.

Solution

SEBI has came out with exhaustive guidelines for Investor Protection Fund (IPF) and Investor Services Fund (ISF) maintained by stock exchanges and depositories.    Concerning contributions of stock exchanges, they will have to contribute 1 per cent of the listing fees received every quarter and the entire interest earned on the security deposit kept by the issuer companies at the time of the offering of securities for subscription to the public and penalty collected by exchanges from trading members.  In respect to contribution to IPF of depositories, they have to contribute 5 percent of their profits from depository operations every year, all fines and penalties recovered from depository participants (DPs) and other users including and income received out of any investments made from the IPF.    In respect of the investor services fund (ISF), the stock exchanges will have to set aside at least 20 per cent of the listing fees received by ISF for providing services to the investing public  ISF will be used for the purpose of the promotion of investor education and investor awareness programs, the cost of training arbitrators and at least 50 per cent of the corpus should be spent in Tier II & Tier III cities.