Sebi has given the green light for transfer of excess contribution by exchanges, from core settlement guarantee fund (SGF) of one clearing corporation to another, in an inter-operable scenario.
This comes following requests made by the stock exchanges.
“It has been decided to allow transfer of excess contribution made by exchanges from the core SGF of one clearing corporation to the core SGF of another, in an inter-operable scenario,” the regulator said in a circular.
However, stock exchanges and clearing corporations have been asked to ensure certain conditions.
Following the receipt of request from an exchange in this regard, the clearing corporation that receives such a request will transfer directly such excess contribution of the exchange, in its core SGF to the core SGF of another clearing corporation, under intimation to that bourse.
Explaining further, Sebi said that suppose exchange ‘A’ requests to transfer its excess contribution from core SGF of clearing corporation ‘B’ to core SGF of clearing corporation ‘C’, then after receipt of such request from ‘A’, ‘B’ will transfer directly the excess contribution of ‘A’ from core SGF of ‘B’ to core SGF of ‘C’, under intimation to exchange ‘A’.
In addition, the clearing corporations have to ensure compliance with requirements of minimum required corpus of core SGF, as prescribed by Sebi.
In 2014, the Securities and Exchange Board of India (Sebi) had put in place a new layer of safety net in form of ‘core settlement guarantee fund’ to mitigate risks from possible default in institutional trades.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
First Published: Sat, January 09 2021. 00:36 IST
read the full story about Sebi permits transfer of bourses’ excess contribution from core SGF
#theheadlines #breakingnews #headlinenews #newstoday #latestnews #aajtak #ndtv #timesofindia #indiannews