Capital markets regulator Sebi on Tuesday revised the methodology for clearing firms with regard to computation of core Settlement Assure Fund corpus in commodity derivatives section.
A core Settlement Assure Fund (SGF) is a corpus used for settlement of trades throughout defaults and all intermediaries — inventory exchanges, clearing firms and brokers — contribute in direction of it.
Sebi obtained representations from clearing firms that in gentle of the turnover and the open curiosity noticed on the inventory exchanges within the latest occasions, the goal corpus stage prescribed in 2018 must be reviewed and methodology for computation of core SGF corpus in commodity derivatives section.
In its round, the regulator stated that the clearing firms in commodity derivatives section can now align their core SGF when it comes to its framework issued in August 2014 and July 2018 and extra contribution could also be returned to the contributing stakeholders on a pro-rata foundation, after taking due approval from Sebi.
Earlier, clearing firms had been mandated to reinforce their core SGF to the respective goal corpus stage within the subsequent years primarily based on general danger, peak open curiosity within the earlier interval in addition to anticipated progress of enterprise sooner or later. The brand new guideline would come into drive from July 1, the Securities and Trade Board of India (Sebi) stated in a round.
The regulator, in August 2014, prescribed norms associated to core SGF, default waterfall and stress take a look at for clearing firms and inventory exchanges. The framework supplied detailed pointers concerning computation of Minimal Required Corpus (MRC) of core SGF in addition to contribution to core SGF.
Additional, Sebi, in June 2018, mandated a minimal quantity of MRC of Rs 10 crore for inventory exchanges having commodity derivatives section.
(This story has not been edited by News18 employees and is revealed from a syndicated information company feed – PTI)