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19 Nov 2024
The Indian Clearing Corporation (ICCL), a subsidiary of BSE, is facing scrutiny from SEBI for alleged violations of clearing norms related to interoperability of clearing corporations (CCP).
ICCL has received a show-cause notice and a letter from SEBI concerning these violations.
ICCL has submitted a settlement application without admitting guilt, indicating its willingness to settle the matter for a proposed amount of ₹8.62 crore, subject to ongoing discussions with SEBI.
This development marks the second regulatory challenge for BSE recently, following its provision of ₹169.8 crore for differential regulatory fees on options contracts.
The issue revolves around SEBI's 2018 circular on CCP interoperability, which mandates sufficient collateral maintenance between CCPs to mitigate financial risks in case of defaults.
ICCL's specific violations relate to these norms, particularly regarding the maintenance of inter-CCP collateral.
As per the circular, collateral between CCPs must be kept separate in designated accounts to ensure clarity and avoid mingling with the CCP's core fund.
ICCL had a bank guarantee of ₹7,700 crore for inter-CCP collateral as of March 31, significantly up from ₹3,000 crore the previous year, as stated in BSE's annual report.
In addition to CCP matters, ICCL's mutual fund segment encountered challenges last year, including incorrect data updates and delays in processing refunds due to technological constraints and procedural errors. These issues arose following SEBI's regulatory changes affecting payment aggregators and data handling protocols.
The BSE has made provisions to address these challenges as outlined in its annual report.
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