SEBI Update - Review of norms for utilization of interest or income from IPF of the Depositories

SEBI, vide Circular dated July 7, 2026, has revised the norms governing the utilization of interest or income earned from investments made out of the Investor Protection Fund (IPF) of Depositories. Earlier, 100% of such interest or income was required to be added back to the IPF corpus. Pursuant to the revised framework, Depositories shall contribute at least 95% of the interest or income earned annually from IPF investments back to the IPF corpus, while up to 5% may be utilized towards expenses related to dedicated IPF Trust employees, administrative and statutory costs (including taxes, audit fees, charity commissioner fees, etc.). Any unutilized portion of the 5% allocation must be ploughed back into the IPF, and any expenses exceeding the prescribed limit shall be borne by the Depository. The revised provisions, introduced to ensure uniformity and consistency with similar norms applicable to stock exchanges, shall come into effect from September 1, 2026.