The liquid assets for trading in equity futures and options contracts are to be maintained separately in the Equity Derivatives Segment.
1.1 Composition of Liquid Assets
|P1 (or P1+) rated Bank Guarantee ("BGs")
||Limit on the Exchange's exposure to a single bank as stipulated by SEBI
|Bank Fixed Deposits Receipts ("FDRs")
|Units of liquid Mutual Fund (or) Govt. Sec. Mutual Fund (by whatever name called which invests in government securities)
|Government Securities and T-Bills
|AAA rated Foreign Sovereign Securities
||10% of cash component of liquid assets
|Liquid (Group-I) Equity Shares (as per the criteria for classification of scrips on the basis of liquidity).
(Only A and B1 group securities forming part of Group I)
||VaR margin for the respective scrips
||Limits specified for each scrip
|Mutual Funds (other than those listed under cash equivalent)
||Member wise and overall limits specified for each scheme
|AA (or higher) rated
||Limits specified for each issue and total not to exceed 10% of the total liquid assets of the member
List of eligible securities and mutual fund units is available on web link
1.2 Minimum Liquid Asset
- The cash/cash equivalent component should be at least 50% of the total liquid assets.
- Hence, non-cash equivalent component in excess of the total cash/cash equivalent component would not be considered as part of Total Liquid Assets.
- Further, the Liquid Assets deposited in form of cash equivalent and non-cash equivalent are subject to the norms in respect of applicable haircuts, single bank and single issuer exposure limits, etc. as per the guidelines issued by Securities and Exchange Board of India (SEBI), BSE and ICCL as well as any other circulars/guidelines that may be issued in respect of the same from time to time.
Additional Liquid Assets
- The Clearing Member shall meet with the minimum liquid assets requirements prescribed by ICCL at all points of time.
- The Clearing Member's liquid net worth after adjusting for the initial margin and extreme loss margin requirements must be at least Rs. 50 Lakhs at all points in time.
- Accordingly, every Clearing Member would be required to maintain Minimum Liquid Networth of Rs. 50 lakhs with ICCL. At least Rs. 25 lakhs of MLN should be in form of cash/Cash equivalent and the balance in form of Cash/Cash equivalent/non-cash equivalent.
Clearing members may deposit additional liquid assets in at any point of time based on the composition of Liquid Assets as detailed in above.
1.4 Procedure for submission of deposits towards Liquid Assets
For enhancement of cash collateral towards liquid assets, the Clearing Members need to send their online instruction in respect of same through the on-line web-based facility BEFS Module to their respective Clearing Banks for confirmation of such request for enhancement of cash collateral.
Alternatively, in case of any contingency the Clearing Members and their designated Clearing Banks may at their discretion avail the facility of manual updations of cash collateral. For this purpose, the members may instruct their Clearing Banks to confirm the cash collateral deposits to the ICCL through written mode viz. Fax, letters or email. Based on such written confirmations received from the Clearing Banks, the cash collateral deposits of the members will be manually updated in the system by the ICCL.
Fixed Deposit Receipts (FDRs)
ICCL will accept the instrument along with the letters if the same are in order and provide the benefit in respect of same to the concerned Clearing Member after confirming the details of the said instrument with the issuing bank.
Bank Guarantee (BGs)
- Renewal of FDRs: Clearing Members may renew the FDRs deposited towards Liquid Assets by submitting a renewal letter from the concerned bank along with a covering letter by the Clearing Member in the prescribed format
Clearing Members can deposit bank guarantee(s) with/without the claim period. In such cases i.e., where bank guarantee(s) are submitted without a claim period, the amount of the bank guarantee(s) would be removed from the liquid assets of the member at least seven days before the expiry date of the bank guarantee(s) or other such period as may be specified by ICCL from time to time.
Government of India Securities towards Liquid Assets
- Renewal of BGs: Clearing Members may renew the BGs deposited towards Liquid Assets by submitting a renewal letter from the concerned bank along with a covering letter by the Clearing Member in the prescribed format to ICCL.
- Facility of reminder emails on matured instruments: ICCL sends reminder emails providing details of the instruments getting matured in the near period to the email ids registered in the BEFS module. Clearing members are, however, advised to submit the renewal instruments within the stipulated period to avoid any hardship.
- Eligible securities and units by way of pledge towards Liquid Assets: Clearing Members can deposit eligible securities and units in dematerialised form towards liquid assets by way of pledge. ICCL on a periodic basis communicates the list of eligible securities and units to its clearing members. These securities and units shall be pledged in favour of ICCL to the designated depository accounts maintained with the approved custodians in this regard.
The valuation of the securities and units deposited towards Liquid Assets shall be in accordance with the norms and limits as prescribed by the ICCL from time to time. The valuation of securities and units will be done on a periodic interval by ICCL and benefit to the extent of net value of the securities/units after haircut, as may be prescribed by ICCL from time to time, shall be considered.
ICCL may revise the list of approved securities/units and the norms in respect of same from time to time. Clearing Members shall regularly monitor their valuation of securities/units lying towards Liquid Assets and replace/replenish the same based on the revised list of approved securities/units and change in norms.
Clearing Members shall also ensure that only eligible securities are pledged and lying towards their Liquid Assets with ICCL and that the said securities are not subject to any lock in period, buy back scheme any charge or lien, encumbrance of any kind, or such other limitations or title is questioned before the court or any regulatory body.
- Procedure for availing pledging of demat securities/units towards Liquid Assets:
Clearing Members can initiate pledging of securities/units in favour of ICCL for deposit of same towards their Liquid Assets, and requisite benefits in respect of same shall be provided by ICCL on confirmation of the pledge by its custodian.
Clearing Members may deposit eligible securities in form of Central Government of India Securities (G-Sec) and Treasury bills (T-bills). The list of such eligible securities shall be communicated by ICCL.
Clearing Members shall ensure that only eligible G-sec and T- Bills are pledged and lying towards their Liquid Assets with ICCL and that the said securities are not subject to any lock in period any charge or lien, encumbrance of any kind, or such other limitations or title is questioned before the court or any regulatory body.
1.5 Procedure for submission of release request of Liquid Assets:
Clearing Members having active membership status can place their on-line request for release of Liquid Assets lying with ICCL by login through specific user-ids and passwords into CLASS collateral module provided to them. Such requests may be considered by ICCL, subject to no lien being exercised by ICCL pursuant to the applicable Rules, Byelaws and Regulations and subject to the availability of the collateral after adjusting for due fulfillment of all obligations and liabilities arising out of or incidental to any deals made by such clearing member/trading member or anything done in pursuance thereof.
Clearing Members can log in to the web-based CLASS Collateral Module and submit their release requests of collateral/s available collaterals for release.
1.6 Transfer of collateral from one trading segment to another trading segment
Clearing Members can transfer collateral across trading segments, online, to the extent of the amount of collateral lying unutilised towards margins or idle in the trading segment from which it is intended to be transferred.
In case of collateral lying in form of bank guarantees issued by banks the same would be available for transfer from one trading segment to another, only after submission of letter from the concerned bank regarding transfer of scope of the bank guarantee in the prescribed format, to ICCL.
The evaluation of collateral transfer across the segments will be subject to hair-cut and other criteria/norms in respect of the concerned segments as specified by SEBI/BSE/ICCL in this behalf from time to time.