Net worth requirements for CC in International Financial Services Centre

Apr 26, 2019 | by Avantis RegTech Legal Research Team


The Securities Exchange Board of India (SEBI) on April 26, 2019, has issued a Circular to amend SEBI (International Financial Services Centre) Guidelines, 2015 which prescribes the net worth requirements for Clearing Corporations (CC) operating in International Financial Services Centre (IFSC).

 The amendments have been made in Clause 5(2) of SEBI (International Financial Services Centre) Guidelines, 2015, namely:

• Clause 5(2)(a) – Every applicant seeking recognition as a clearing corporation shall have, in the form of liquid assets, a minimum net worth equivalent of fifty crore rupees.

• Clause 5(2)(b) – Every recognized clearing corporation, on commencement of operations, shall have at all times, in the form of liquid assets, a minimum net worth equivalent of fifty crore rupees  or capital   as determined in accordance with the aforementioned  SEBI  circular  dated April  10, 2019  as  amended  from  time  to time.

• Clause 5(2)(c) - Further, every recognized clearing corporation shall enhance, over a period of three years from commencement of operations, its net worth, to be maintained in the form of liquid assets, to a minimum equivalent of one hundred crore rupees or capital as determined in accordance with aforementioned SEBI circular dated April 10, 2019 as amended from time to time.

The Clearing Corporation shall regularly review their net worth requirement and ensure that the net worth does not fall below the prescribed threshold. The certificate signed by the Managing Director of Clearing Corporation shall be submitted to SEBI within 15 days from the end of every quarter. The submission shall be made applicable for the April-June, 2019 quarter.

Where the net worth of Clearing Corporation falls below the prescribed threshold, it shall inform SEBI the reason behind the same and the measures intend to adopt in order to re-attain the prescribed net worth.

[Circular No. SEBI/HO/MRD/DRMNP/CIR/P/2016/60]

Click here to download the Circular.


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