Media Release
Interoperability of Clearing Corporation
Mumbai: May 28, 2019: SEBI, vide circular CIR/MRD/DRMNP/CIR/P/2018/145 dated November 27, 2018, laid down the broad guidelines for operationalizing the interoperable framework among Clearing Corporations, which were required to be adhered to and operationalized by Stock Exchanges and Clearing Corporations by June 01, 2019. Subsequently, Operating Guidelines for interoperability were jointly issued by NSE Clearing Ltd, Indian Clearing Corporation Ltd. and Metropolitan Clearing Corporation of India Ltd. on April 15, 2019.
All Stock Exchanges and all Clearing Corporations have put in place the required infrastructure for operationalizing interoperability as announced earlier and are set to operate in an interoperable manner with effect from June 03, 2019 (June 01 and June 02 being trading holidays).
While a large number of Clearing members have updated their systems and processes necessary to implement interoperability, a few market participants have expressed that they are still in the process of developing and testing their systems and processes and need more time to move to the interoperable framework.
To ensure that the transition to interoperability is seamless and non-disruptive, it has been jointly decided by all Stock Exchanges and Clearing Corporations to provide a further period of 1 month to such Clearing members so that the requisite development of systems and process, and testing thereof, could be completed. Accordingly, clearing members are hereby advised to note that they shall mandatorily move to interoperable framework by July 01, 2019.
About National Stock Exchange of India Limited (NSE):
National Stock Exchange of India Ltd. (NSE) is the leading stock exchange in India and the second largest in the world by nos. of trades in equity shares from January to December 2018, according to World Federation of Exchanges (WFE) report. NSE was the first exchange in India to implement electronic or screen-based trading. It began operations in 1994 and is ranked as the largest stock exchange in India in terms of total and average daily turnover for equity shares every year since 1995, based on SEBI data. NSE has a fully-integrated business model comprising exchange listings, trading services, clearing and settlement services, indices, market data feeds, technology solutions and financial education offerings. NSE also oversees compliance by trading and clearing members with the rules and regulations of the exchange. NSE is a pioneer in technology and ensures the reliability and performance of its systems through a culture of innovation and investment in technology. NSE believes that the scale and breadth of its products and services, sustained leadership positions across multiple asset classes in India and globally enable it to be highly reactive to market demands and changes and deliver innovation in both trading and non-trading businesses to provide high-quality data and services to market participants and clients.
About NSE Clearing Limited (NSE Clearing):
NSE Clearing Limited (National Clearing) formerly known as National Securities Clearing Corporation Limited (NSCCL), a wholly owned subsidiary of NSE, was incorporated in August 1995. It was the first clearing corporation to be established in the country and also the first clearing corporation in the country to introduce settlement guarantee. NSE Clearing has been recognized as QCCP by SEBI, Third Country CCP (TC-CCP) by European Securities Market Authority, and as TC-CPP by Temporary Recognition Regime of the UK.
For more information, please visit: www.nseindia.com and www.nscclindia.com
About BSE
BSE (formerly Bombay Stock Exchange) established in 1875, is Asia’s first & now the world’s fastest Stock Exchange with a speed of 6 microseconds. BSE is India’s leading exchange group and has played a prominent role in developing the Indian capital market. BSE is a corporatized and demutualised entity, with a broad shareholder base that includes the leading global exchange- Deutsche Bourse, as a strategic partner. BSE provides an efficient and transparent market for trading in equity, debt instruments, equity derivatives, currency derivatives, commodity derivatives, interest rate derivatives, mutual funds and stock lending and borrowing.
BSE also has a dedicated platform for trading in equities of small and medium enterprises (SMEs) that has been highly successful. BSE also has a dedicated MF distribution platform BSE StAR MF which is India Largest Mutual Funds Distribution Infrastructure. On October 1, 2018, BSE launched commodity derivatives trading in Gold, Silver, Copper & Oman Crude Oil.
BSE provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. It has a global reach with customers around the world and a nation-wide presence. BSE’s systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments.
Indian Clearing Corporation Limited, a wholly owned subsidiary of BSE, acts as the central counterparty to all trades executed on the BSE trading platform and provides full novation, guaranteeing the settlement of all bonafide trades executed. BSE Institute Ltd, another fully owned subsidiary of BSE runs one of the most respected capital market educational institutes in the country. Central Depository Services Ltd. (CDSL), associate company of BSE, is one of the two Depositories in India.
About ICCL
Indian Clearing Corporation Limited ("ICCL") was incorporated in 2007 as a wholly owned subsidiary of BSE Ltd. ("BSE"). ICCL carries out the functions of clearing, settlement, collateral management and risk management for various segments of BSE. ICCL undertakes to act as the central counterparty to all the trades it provides clearing and settlement services for.
ICCL settles trades reported on the Indian Corporate Debt Segment and the Mutual Fund ("StAR MF) Segment of BSE and clears and settles trades executed on all the other segments of BSE, including Equity Cash, Equity Derivatives, BSE SME, Offer for Sale, Securities Lending & Borrowing, Debt Segment, Interest Rate Futures and the Currency Derivatives Segment.
ICCL has been accorded Qualified Central Counterparty ("QCCP") status by the Securities and Exchange Board of India ("SEBI"). A QCCP member is subjected to lower capital requirements/charges under the Basel III Framework introduced by the Basel Committee on Banking Supervision. The capital requirements for Banks and Primary Dealers in India, for a QCCP like ICCL is subject to the Capital Adequacy Standards and Risk Management Guidelines for Standalone Primary Dealers as prescribed by the Reserve Bank of India ("RBI"). ICCL, as a Qualified CCP, is additionally required to comply with the rules and regulations that are consistent with the Principles for Financial Market Infrastructures ("PFMI") issued by the Committee on Payment and Settlement Systems ("CPSS") and International Organisation of Securities Commissions ("IOSCO").These rules and regulations focus on limiting systemic risk and on enhancing transparency and stability in the financial market. A clearing member registered with a QCCP like ICCL will be a beneficiary of the enhanced risk management framework of ICCL and will also benefit in the form of lower capital costs.
ICCL is the only clearing corporation in India to have been granted "AAA" rating by two rating agencies, India Ratings Ltd. (Indian arm of Fitch Ratings) and Care Ratings Ltd.
ICCL has established a robust Risk Management framework which utilises a Value at Risk model for margining of Equity Cash Segment and a risk based SPAN model for all its derivatives transactions, viz. equity derivatives, currency derivatives and interest rate derivatives. ICCL aims to provide secure, capital-efficient counterparty risk management and post-trade services.
20 banks have been empanelled as Clearing Banks for providing clearing and settlement services for trades executed on the BSE platform; the aggregate lines of credit being more than the average daily funds pay-out.
ICCL remains committed to the safety of investors and members and to further add to this security, ICCL has subscribed to a unique Insurance Policy for INR 375 Crore. The objective of the Policy is to protect ICCL against counterparty defaults and add a further capital cushion to the ICCL networth making the resources of the non-defaulting members even safer.
About MSE
Since its inception in 2008, MSE—the third national stock exchange—is committed to encouraging broader participation in equity and growing the non-equity segment(s). On the anvil are a slew of differentiated products, some likely to be the first in the Indian market. The product positioning of MSE shall be complemented by reduced operating cost for members, better utilization of their capital and technology upgrade.
Metropolitan Stock Exchange of India offers a transparent, hi-tech platform for trading in Capital Market, Futures & Options (F&O), Interest Rate Derivatives, Currency Derivatives, ETFs and Debt Market. At present, 245 companies are listed on the exchange, and about 1,300 large corporates are available for trading in the permitted to trade category.
About MCCIL
Metropolitan Clearing Corporation of India Limited (MCCIL) is a subsidiary of Metropolitan Stock Exchange of India Ltd. (MSE), a new age Clearing Corporation constituted to undertake clearing and settlement of deals in multi-asset classes. The company offers best-in-class services to its clearing members with the help of its state of the art risk management framework and unparalleled clearing and settlement systems with dedicated linkages with clearing partners.
The company commenced its operations on February 16, 2009, with clearing and settlement of trades for MSE. From October 1, 2018, MCCIL also started its clearing services for ICEX, thereby becoming the only SEBI recognized clearing corporation to provide services for multiple exchanges and multiple asset classes. MCCIL has an impeccable track record of having completed all settlements from the date of commencement of its operations in a timely manner without defaults.
MCCIL is designated as a Qualified Central Counter Party (QCCP) by the SEBI. MCCIL is recognized by ESMA as a Third Country Central Counter Party. MCCIL is also recognized by Bank of England as Third Country Central Counter Party that will offer clearing services and activities in the United Kingdom under Temporary Recognition Regime (TRR) of the Central Counterparties (Amendments, etc., and Transitional Provision) (EU Exit) Regulations 2018.
For any clarifications please contact:
NSE
Kumar Kartikey
Chief Manager, Corporate Communication
Mobile: 98195 49984
Email id: kumark@nse.co.in
BSE
Yatin Padia
Corporate Communication
Mobile: 9833010098
Email id: Yatin.padia@bseindia.com
MSE
Jayesh Shinde
Head, Communications & CSR
Mobile: 98677 79919
Email: Jayesh.Shinde@msei.in