SEBI issued a circular regarding the Contribution to Core Settlement Guarantee Fund and Default Waterfall for Limited Purpose Clearing Corporation (PLCC)

The Securities and Exchange Board of India (SEBI) on June 19, 2024, issued a circular regarding the Contribution to Core Settlement Guarantee Fund and Default Waterfall for Limited Purpose Clearing Corporation (PLCC).

Accordingly, the following Para (6.5.1.4) shall be included and Para 6.8.2 shall be revised and read as follows:

• 6.5. Contribution to Core SGF of Limited Purpose Clearing Corporation

6.5.1.4. Participants contribution:

Contribution of Participants who desire direct participation and not through a clearing member to Core SGF shall be risk based and equivalent to deficit in MRC post contribution by Issuers and Clearing Members. The said contribution by Participants shall be subject to the following conditions:

that no exposure shall be available on Core SGF contribution of any Participant (exposure-free collateral of participants available with CC can be considered towards Core SGF contribution of Participants), and that required contributions of individual Participants shall be pro-rata based on the risk they bring to the system.

LPCC shall have the flexibility to collect Participant primary contribution, including flexibility to either collect the Participant primary contribution upfront or staggered over a period of time. In case LPCC does not seek contribution from Participants or seeks staggered contribution, the remaining balance shall be met by LPCC to ensure adequacy of total Core SGF corpus at all times. Such LPCC contribution shall be available to LPCC for withdrawal as and when further contributions from Participants are collected / received.

• 6.8. Timelines for contribution to and recoupment of Core SGF of LPCC

6.8.2. In the event of usage of Core SGF during a calendar month, contributors shall, as per usage of their individual contribution, immediately replenish the Core SGF to MRC. However, such contribution towards replenishment of Core SGF by the members / [Participants] would be restricted to only once during a period of 30 calendar days regardless of the number of defaults during the period. The period of 30 calendar days shall commence from the date of notice of default by CC to market participants.

[Circular No. SEBI/HO/MRD/MRD-PoD-2/P/CIR/2024/83]