Credit of Penalty for non-collection of Margins on Commodity Derivatives Segments to Core SGF by SEBI

Jun 21, 2019 | by Avantis RegTech Legal Research Team


The Securities and Exchange Board of India (SEBI) on June 20, 2019, in order to protect the interests of investors in securities and to promote the development of, and to regulate the securities market, has clarified that all penalties levied on short-collection or non-collection of Margins as prescribed by SEBI Circular SEBI/HO/CDMRD/DRMP/CIR/P/2016/80 dated September 07, 2016 shall be credited to Core SGF only. The SEBI vide Circular prescribed mechanism for levying penalties on short-collection or non-collection of Margins where all the penalties collected as prescribed therein shall be credited to the Investor Protection Fund (IPF) of the Exchange. SEBI has noted that while a few Clearing Corporations or Exchanges are crediting the aforementioned penalties to Core SGF, others are crediting the same to IPF.

Further, it is also directed that penalties, if any, on short-collection or non-collection of Margins for commodity derivatives segments levied by CCs or exchanges that have already been transferred to IPF Trust, the same shall be transferred to Core SGF, effective from the day on which CCs started clearing function for commodity derivatives segment. For this purpose, the penalty amounts to be so transferred to the Core SGF may be deemed to have been levied, collected and transferred by the respective CC with effect from the date from which the said CC commenced clearing functions for commodity derivatives segment.

This circular shall be effective from the date of the circular that is June 20, 2019.

[Circular No. SEBI/HO/CDMRD/DRMP/CIR/P/2019/73]

Click here to download the Circular.

 


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