**Summary:**
This Securities and Exchange Board of India (SEBI) circular, reference number SEBI/HO/MRD2/DCAP/CIR/P/2021/03, dated January 08, 2021, addresses the transfer of excess contributions made by Stock Exchanges from the Core Settlement Guarantee Fund (SGF) of one Clearing Corporation to the Core SGF of another Clearing Corporation within an interoperable framework. This circular follows up on previous SEBI Circular No. CIR/MRD/DRMNP/25/2014 dated August 27, 2014, which prescribed norms for contributions by Stock Exchanges to the Core SGF of a Clearing Corporation, and Circular No. CIR/MRD/DRMNP/CIR/P/2018/145 dated November 27, 2018, which outlined guidelines for operationalizing interoperability among Clearing Corporations.
The circular permits Stock Exchanges to transfer excess contributions from one Clearing Corporation's Core SGF to another, upon request from the Exchange. The Clearing Corporation receiving the transfer request is instructed to directly transfer the excess contribution to the Core SGF of the other Clearing Corporation, while informing the requesting Exchange. Clearing Corporations must ensure compliance with the Minimum Required Corpus (MRC) of the Core SGF as prescribed by SEBI.
This circular is issued under the authority granted by Section 11(1) of the Securities and Exchange Board of India Act, 1992, with the aim of protecting investor interests, promoting the development of the securities market, and regulating the securities market.
For further information, contact Sudeep Mishra, General Manager, at Tel no.: 022-26449365 or via email at Sudeepm@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): The regulatory body issuing the circular and responsible for regulating the securities market in India.
Stock Exchanges: Entities that facilitate the buying and selling of securities.
Clearing Corporations: Organizations that provide clearing and settlement services for securities transactions.
Core SGF (Settlement Guarantee Fund): A fund maintained by Clearing Corporations to guarantee the settlement of trades in case of default by a member.
Circular No.CIRMRDDRMNP252014 dated August 27, 2014: A previous circular issued by SEBI prescribing norms for contribution by a Stock Exchange to Core SGF of a Clearing Corporation.
Circular No. CIRMRDDRMNPCIRP2018145 dated November 27, 2018: A previous circular issued by SEBI prescribing broad guidelines for operationalizing the interoperable framework among Clearing Corporations.
Minimum Required Corpus (MRC): The minimum capital required for Core SGF as prescribed by SEBI.
Securities and Exchange Board of India Act, 1992: The legal act that empowers SEBI to protect investors and regulate the securities market.
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Securities and Exchange Board of India
CIRCULAR
SEBI/HO/MRD2/DCAP/CIR/P/2021/03 January 08, 2021
All recognized Stock Exchanges and Clearing Corporations
Sub: Transfer of excess contribution made by Stock Exchanges from Core SGF
of one Clearing Corporation to the Core SGF of another Clearing Corporation
1. SEBI, vide Circular No.CIR/MRD/DRMNP/25/2014 dated August 27, 2014, prescribed
norms for contribution by a Stock Exchange to Core SGF of a Clearing Corporation.
Further, SEBI, vide Circular No. CIR/MRD/DRMNP/CIR/P/2018/145 dated November
27, 2018, prescribed broad guidelines for operationalizing the interoperable framework
among Clearing Corporations.
2. SEBI has been receiving representations from Stock Exchanges, requesting to allow
transfer of excess contribution made by Stock Exchanges from Core SGF of one
Clearing Corporation to the Core SGF of another Clearing Corporation, in inter-operable
scenario.
3. The above representations have been examined and it has been decided to allow
transfer of excess contribution made by Stock Exchanges from Core SGF of one
Clearing Corporation to the Core SGF of another Clearing Corporation, in inter-operable
scenario. However, Stock Exchanges and Clearing Corporations are advised to ensure
the following:
a) Upon receipt of request from an Exchange in this regard, the Clearing Corporation
which receives such request shall transfer directly such excess contribution of the
Exchange, in its Core SGF to the core SGF of another Clearing Corporation, under
intimation to that Exchange.
For Example, if 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’ would transfer directly the excess contribution of
‘A’ from Core SGF of ‘B’ to Core SGF of ‘C’, under intimation to Exchange ‘A’.
b) The Clearing Corporations shall ensure compliance with requirements of Minimum
Required Corpus (MRC) of Core SGF as prescribed by SEBI.
Page 1 of 2¼ããÀ¦ããè¾ã ¹ãÆãä¦ã¼ãîãä¦ã ‚ããõÀ ãäÌããä¶ã½ã¾ã ºããñ¡Ã
Securities and Exchange Board of India
4. 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
Sudeep Mishra
General Manager
Tel no.: 022-26449365
Email: Sudeepm@sebi.gov.in
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