SEBI Forms Committee to Review Clearing Corporations

In response to the dynamic growth of Indian securities markets, SEBI has established a committee, chaired by Usha Thorat, former Deputy Governor of the RBI, to assess and propose enhancements to the ownership and economic framework of clearing corporations.

Reviewing Ownership Structure

The committee will evaluate the feasibility of expanding the pool of eligible investors in clearing corporations and suggest categories of stakeholders permitted to hold stakes. It will also consider adjusting caps on shareholding by various entities within these corporations.

Optimizing Ownership Patterns

Given the cross-exchange services provided by clearing corporations, the committee will recommend ownership patterns conducive to interoperability, drawing insights from global clearing corporation models. It will propose alternatives mindful of capital requirements for settlement guarantee funds and liquidity during market-wide stress.

Enhancing Financial Independence

The committee’s mandate extends to crafting financial structures ensuring the autonomy and resilience of clearing corporations. It will explore strategies for financial independence while addressing stakeholders’ expectations and sustaining operational robustness.

Addressing Dominance Concerns

Currently, clearing corporations predominantly operate as subsidiaries of parent exchanges, potentially compromising their autonomy. The committee will deliberate on mitigating this dependence, considering the integration of clearing corporations’ financials within parent exchange statements.

Ensuring Sustainability

Lastly, the committee will strategize on maintaining clearing corporations as viable entities capable of withstanding market fluctuations. This involves optimizing financial structures to uphold sustainability and operational continuity.