The Clearing Corporation of India Ltd (CCIL) on June 07, 2024, issued a notification regarding the Settlement of Government Securities Lending Transactions (GSL Transactions).
The following has been stated: -
•GSL Transaction refers to dealing in Government securities involving lending of eligible Government securities, for a fee, by the owner of those securities (the lender) to a borrower, on the collateral of other Government securities, for a specified period of time, with an agreement that the borrower shall return to the lender the security borrowed and the latter shall return the security received as collateral to the former at the end of the agreed period.
•CCIL shall act as a Central Counterparty to all GSL Transactions received for settlement by CCIL in terms of Securities Segment Regulations.
•GSL Transactions received would be identified separately, distinct from Outright, Repo, and Reverse Repo trades.
•GSL Transactions for Securities against Securities shall involve two repo trades, wherein the Security lender receives another security in exchange for the lent security. Charges shall be applied for the first leg of each GSL Transaction.
•All other provisions including, ‘shortage handling’ and ‘risk management’ as applicable to the extant settlement of outright and Market Repo trades shall be applicable for settlement of GSL Transaction also.
•Members are informed that the following have been amended.
1. Bye-Laws
2. Securities Segment Regulations
•The changes to the Bye-Laws and Securities Segment Regulations shall be effective from July 08, 2024.
[Notification No. CCIL/Legal/24/10]
