The National Stock Exchange (NSE) on May 26, 2023, issued a notification on Bank Guarantees (BGs) created out of clients’ funds.
The following has been stated namely: -
• The trading members are required to report the breakup of BG placed as collateral with clearing members on a periodic basis. In view of the same, for the purpose of reporting the BG details to the Exchange, it is clarified as under:
a. Members shall be required to report details of Bank guarantee breakup on a weekly basis.
b. Reporting requirement shall be effective from May 27, 2023, and the first submission of this data shall be for the week ended May 27, 2023, to be submitted by the next trading day of the following week that is by May 29, 2023, and for every week thereafter. Data shall be reported on Saturday of each week.
c. The reporting requirement shall apply to those trading members who have created BG in favor of their Clearing Member. The trading member shall not report BG created in favor of the clearing corporation.
d. The reporting requirement is not applicable to trading members who are self-clearing members as they are required to report to their respective clearing corporation as per the applicable guidelines of the respective clearing corporation.
e. The reporting requirement shall not apply to members who do not have Bank Guarantees in favor of clearing members. However, such members shall provide a one-time declaration to Exchange.
The format for submitting the BG breakup to the Exchange has been inserted
[Notification No. NSE/INSP/56839]
