The exchange has also decided to increase the maximum amount of compensation payable under the Customers' Protection Fund (CPF) in respect of any single customer claimant from Rs 2.25 lakh to Rs 3 lakh.

Interestingly, the compensation is three times SEBI's prescribed limit of Rs 1 lakh and also the highest offered by any exchange in the country.

"The purpose of the CPF is to compensate members of the public who invest and deal in securities through the BSE in respect of their claims against defaulter members," explained BSE president JC Parekh.

"This measure will substantially enhance the protection provided to the investors," he claimed. The CPF is governed by trustees nominated by the governing board of theexchange.

As of June 30, the total corpus of CPF amounted to Rs 58.40 crore which, according to Parekh, has been deposited in various banks in order to reap the benefits of rising interest rates. The brokers are expected to contribute Re 1 on a turnover of Rs 10 lakh. Moreover, BSE also allocates 2.5 per cent of the listing fees received and the entire amount of interest amount earned from the deposits collected at the rate of one per cent of the capital raised by companies through public or rights issue.

The corpus of TGF is pegged at Rs 315 crore of which Rs 115 crore is held in the form of cash and the rest in the form of bank guarantees and exchange approved securities of blue chip companies.

According to Parekh, a customer of the defaulter broker can lodge a claim with the trustees of the fund within a period of six months from the date of the broker being declared defaulter. "The trustees as per the bye-laws will not make payment towards losses incurred by customers due to any speculativetransactions," clarified Parekh, while explaining the purpose of the fund.Issues regarding payment to Stock Holding Corporation, clearing of payout of settlement ended on July 3 and introduction of derivatives were also discussed at the meeting.