Media Release

ICCL Facilities for Electronic Confirmation of issuance of Bank Guarantee (BG) by Banks

Mumbai, September 04, 2015: Members are hereby informed, that Indian Clearing Corporation Ltd. (ICCL) would introduce a facility through empanelled Banks for electronic confirmation of Bank Guarantees issued in favour of ICCL towards Liquid Assets (collateral) requirements for clearing members.

 The process for availing this facility would be as follows:

ü  Members who wish to avail such facility can approach any of the empanelled banks.

ü  Submit their request along with the required documents/information and complete the necessary formalities as my be  required by the concerned banks for issuing Bank Guarantees towards Liquid Assets (Collateral) requirements for members of ICCL.

ü  If the documents are in order as per bank’s requirements, then the Bank may issue the Bank Guarantee documents in favour of ICCL as per the existing process.

ü  Bank will update and confirm such Bank Guarantee information electronically to ICCL through the system provided by ICCL.

The process for withdrawal of such Bank Guarantees would be same as that of the current process for the Bank Guarantee Release.

The following bank shall provide this facility to member’s w.e.f. September 07, 2015:

About ICCL Ltd:

Indian Clearing Corporation Limited (ICCL) acts as the clearing corporation to all trades executed on the various segments of BSE. ICCL is a globally recognised Central Counterparty (“CCP”) which caters to domestic as well as international participants. ICCL has been accorded Qualified CCP status by the Securities and Exchange Board of India.

ICCL provides full novation and has the responsibility of guaranteeing contractual performance by playing the role of a central counterparty for all trades on BSE, thereby eliminating counterparty risk for the members. In essence, it splits the original contract between the initiating counterparties into two new contracts; one each between ICCL and the initiating counterparties. ICCL has put in place a risk management framework to mitigate the risk it undertakes in its capacity as a Clearing Corporation.

However, as a second line of defence to the margining and risk management systems, ICCL has subscribed to the Insurance policy.  In the case of loss arising out of defaults, the capital of Clearing Corporation and its non-defaulting members would be at risk, in accordance with the default waterfall. The magnitude of potential loss due to default a clearing corporation can undertake without affecting the capital of non-defaulting members is contingent upon the networth of the Clearing Corporation and additional capital cushions, which insulate the default loss and the non-defaulting members’ resources.

ICCL, with its networth of over INR 450 Crore, which is nearly 3 times its default fund requirements, is well capitalized and instills a high level of confidence in its members and investors of the ability of ICCL to handle extreme loss situations. The additional capital cushion of INR 375 Crore, provided by the Insurance cover, along with the networth covers over 5 times the default fund requirement of ICCL and further increases the safety for domestic and international participants alike.

For More Information 
Yatin Padia – 022 2272 8516
Marketing Communications
yatin.padia@bseindia.com