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Clearing corporations in International Financial Services Centre accept bank guarantees issued by bank branches located in IFSC as eligible collateral. The clearing corporations accept cash and cash equivalents, Indian securities held with foreign depositories, foreign securities including units of liquid mutual funds, and gold for trades in all product categories. Cash and cash equivalents form at least 50 percent of the total liquid assets at all times. Clearing corporations put systems in place, amend relevant bye-laws, rules, and regulations, notify members, and report implementation status to SEBI in the Monthly Report.
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CIRCULAR
CIR/MRD/DRMNP/41 /2018
February 20, 2018
To All recognized Clearing Corporations in International Financial Services Centre
Dear Sir / Madam,
Sub: Acceptance of Bank Guarantees by Clearing Corporations in International Financial Services Centre (IFSC)
SEBI vide circular no. SEBI/HO/MRD/DSA/CIR/P/2016/125 dated November 28, 2016, specified the guidelines for functioning of Stock Exchanges and Clearing Corporations in IFSC.
Based on the feedback received from the clearing corporations, it has been decided to amend para 2.6.3 of the abovementioned SEBI circular dated November 28, 2016, to read as under -
2.6.3. Eligible collateral: Clearing corporations in IFSC shall be permitted to accept cash and cash equivalents (which shall include major foreign currencies as may be decided by the clearing corporation from time to time, term deposit receipts and bank guarantees issued by bank branches located in IFSC), Indian securities held with foreign depositories, foreign securities including units of liquid mutual funds and gold, as eligible collateral for trades in all product categories. However, cash and cash equivalents shall form at least 50% of the total liquid assets at all times.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market.
This circular is available on SEBI website at www.sebi.gov.in, under the category "Circulars".
Yours faithfully,
Sanjay Purao General Manager Division of Risk Management and New Products Market Regulation Department sanjayp@sebi.gov.in Ph no - 2644 9343
