Investor Protection Fund/Consumer Protection Fund (IPF/CPF)
The Investor Protection Fund (IPF) or Consumer Protection Fund (CPF) is a fund set up by the stock exchange or market regulator to protect investors’ interests and provide a safety net in case of broker defaults. It is a type of insurance fund that compensates investors who suffer losses due to fraudulent or negligent actions of stockbrokers or other market intermediaries.
The IPF/CPF is typically funded by contributions from stockbrokers and other market intermediaries, and the fund is managed by the stock exchange or market regulator. The amount of contribution varies depending on the size of the intermediary and the level of risk associated with their operations.
In case of broker defaults, the IPF/CPF provides compensation to investors who have suffered losses due to the default. The amount of compensation is limited and varies depending on the rules of the particular fund and the extent of losses suffered by investors.
The IPF/CPF is an important mechanism to protect investors and provide confidence in the treasury market. It provides a safety net in case of broker defaults and helps to ensure that investors are not left with significant losses due to the fraudulent or negligent actions of intermediaries.
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