The National Stock Exchange (NSE) on October 06, 2023, issued a notification regarding the Reporting requirement on Bank Guarantees (BGs) created out of clients’ funds.
This is with reference to the SEBI Circular on "Bank Guarantees (BGs) created out of clients’ funds". In accordance with the aforesaid SEBI Circular, the following provisions were required to be implemented:
a. No new Bank Guarantees (BGs) shall be created out of clients’ funds by Members w.e.f. May 01, 2023.
b. Existing Bank Guarantees (BGs) created out of clients’ funds shall be wound down by September 30, 2023.
Further, as per Para 5 of the aforementioned SEBI Circular, members are required to submit a certificate to the Stock Exchange by October 16, 2023, confirming the implementation of provisions of the SEBI Circular duly certified by their Statutory Auditor. Accordingly, Members are advised to submit the aforesaid certificate in the prescribed format enclosed as Annexure A. Members who are carrying out only proprietary trading without any clients since the date of the above SEBI Circular shall submit a one-time declaration. An online facility is being provided to members for submission of Statutory Auditor Certificate / one-time declaration to the Exchange. The user manual for submission of the certificate / one-time declaration is enclosed as Annexure B.
[Notification No. NSE/INSP/58772]
