Attention of the members is drawn to SEBI circular No. SEBI/HO/MRD2/DCAP/CIR/P/2020/127 dated July 20, 2020 in respect to the framework to enable verification of upfront collection of margins from clients.

In context to said circular, Clearing Members have made representations to consider alternate mechanisms of margin reporting for Custodian Participant (CP) trades. Accordingly, in consultation with the Clearing Members and based on approval received from SEBI, the treatment of CP trades for peak margin reporting for all trading segments cleared by Indian Clearing Corporation Ltd. (ICCL) shall be as under:

A.     Process for Clearing Members (including Custodial Clearing Member & Professional Clearing Member) to confirm the availability of peak margins:

1. The clearing corporation shall aggregate the margins on confirmed trades as well as unconfirmed trades for a given CP and include the same in the snapshot provided to the concern members.

2. The end of day file downloaded to clearing members shall have EOD margins for all confirmed trades and peak across all snapshot as computed in point 1.

3. Clearing members shall be required to report the end of day and the peak margins as per the file downloaded by Clearing Corporation. 

4. In case of any shortages in the reporting as per point 3 the same shall be considered as shortfall of margin collection and penalty for the same shall be applicable. The penalty shall be levied and collected from the clearing member of the CP. The clearing member can collect such penalty from the respective CP.

5. Reporting of peak margins by clearing members shall be a confirmation of availability of upfront margins at time of trade.

6. Even in cases where trades are rejected by clearing member due to mismatch or error, the clearing member shall be responsible to report peak margins/penalty for short reporting. Such penalty can be collected from the respective Trading Members by the clients/clearing member. 

7. The existing process of trade confirmation and settlement will continue between clearing member and Clearing Corporations, accordingly till the trade is confirmed by custodial clearing member the collateral of the clearing member of the executing trading member would be blocked by the Clearing Corporation.

8. The date of implementation of the above process shall be communicated subsequently

B.      Interim Process of margin collection and reporting:

Till implementation of above process the following process of margin collection and reporting for all trading segment shall be implemented:

1. The trading member shall report the peak margins for such CP trades.

2. Clearing member shall be required to confirm the peak margins collected and placed by the CP with them to Clearing Corporation on a dedicated email id provided by Clearing Corporation

The format for reporting peak margins collected for CP trades for all trading segments cleared by ICCL is provided as Annexure A.

The provisions of this circular shall be applicable from December 01, 2020.

In case of any clarifications, members may contact their respective Relationship Managers or below mentioned contacts:

Clearing & Settlement Dept. for operational aspect	+91-22-22728467/8185/8567	bse.csd@bseindia.com
Membership & Inspection Dept. for compliance aspect	+91-22-22728365/8788	iccl.membership@icclindia.com

For and on behalf of Indian Clearing Corporation Ltd.

Piyush Chourasia

Chief Risk Officer and Head Strategy

Annexure A

The reporting of Peak Margins for CP trades shall be done in the below-mentioned format on the email id  : cp.peakmargins@icclindia.com with subject “CM - CP Peak Margin Reporting -Segment - Clearing No.  Member Name -CMPAN - Trade Date”

Where  :

Segment is  EQ(Cash)/FNO  (Futures & Options) / CDX (Currency Derivatives)/CO(Commodity Derivatives) , as applicable

Clearing No. :  Clearing Member ID as provided by ICCL

Member Name –  Reporting Clearing Member Name

CMPAN - Reporting Clearing member PAN 

Trade Date -Date of Trade Execution

File Format   : CSV

File Nomenclature: <EQ_”Clearing No.”_Trade Date> for Equity Cash Segment. 

File Nomenclature: <FNO_”Clearing No.”_Trade Date> for Futures and Options Segment. 

File Nomenclature: <CDX_”Clearing No.”_Trade Date>_ for Currency Derivatives Segment. 

File Nomenclature: <CO_”Clearing No.”_Trade Date> for Commodity Derivatives Segment. 

File description  :

Sr.No.	Particulars
1	Trade Date
2	Segment (EQ/FNO/CDX/CO)
3	Custodian Participant code
4	Peak Margins Reporting Amount