With an aim to reduce trading costs, regulator Sebi Tuesday came out with a framework for interoperability among clearing corporations (CCPs), which will be operationalised by June 1, 2019.

At present, different bourses have their own CCPs , which handle settlement of trades on the respective stock exchanges.

The interoperability would permit trading members to clear trades through a firm of their choice instead of going through the CCP owned by the bourse on which the trade was executed. The framework comes after the Sebi board in September approved a proposal to enable interoperability among CCPs.

In a circular, Sebi said, interoperability framework will  be applicable to all the recognised CCPs excluding those operating in International Financial Services Centre.

"All the products available for trading on the stock exchanges (except commodity derivatives) shall be made available under the interoperability framework," it added.

The regulator asked stock exchanges and CCPs to "take all necessary steps to operationalise interoperability at the earliest but not later than June 1, 2019".

The move assumes significance in the wake of the disruptions in the functioning of a stock exchange and the respective CCPs in recent past.

Under the guidelines, the agreements entered into by the exchanges and CCPs will include system capability, inter-CCP links, risk management framework, monitoring of client margin/position limits.

Obligation system, settlement process, surveillance systems, sharing of client data, sharing of product information, default handling process and dispute resolution process will also be part of the agreements.