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Notices
Notice No20230529-29Notice Date29 May 2023
CategorySettlement/RMSSegmentGeneral
SubjectFAQ for Reporting of Bank Guarantees (BGs) created out of clients’ funds
Content

All Clearing Members

 

This is further to ICCL circular no. 20230523-37 dated May 23, 2023, notifying members with regards to reporting of Bank Guarantees (BGs) created out of clients’ funds on a weekly basis. Based on queries received from members, frequently asked questions (FAQ) are being issued as below:-

 

1.      Whether the reporting is applicable to members who clear proprietary trades and do not deal with clients?

ICCL: Yes, the reporting is applicable to all members who have placed Bank guarantees with ICCL.

 

2.      Does a member have to report If BG is not placed with ICCL as collateral?

ICCL: Members who have not placed any BG with ICCL need not report.

 

3.      Whether members have to report all the BGs across Clearing Corporations or specifically that of ICCL?

ICCL: Members need to report BGs which are placed with ICCL only as collateral, and BGs placed with NCL for which benefit has been provided at ICCL.

 

4.      When a BG matures on Saturday and is not released by ICCL, should BG amount be reported on Saturday?

ICCL: Bank guarantees which have expired need not be reported.

 

5.      If a member has given BG to ICCL whether BG created out of client funds and Prop funds needs to be reported?

ICCL: Yes, members need to report total BG amount as collateral with ICCL across all segments with bifurcation of Total BG amount (out of client funds) as collateral and total BG amount (out of prop funds).

 

6.      While reporting of BG member should consider Funded or Non-Funded portion?

ICCL: Member needs to consider amount mentioned for both Funded as well as non-Funded portion of BG while reporting. For e.g.in the below example if a clearing member has below BGs with ICCL:

Funds utilized for creation of BG

Funded portion

BG created and placed with ICCL

Non funded portion

Total BG amount (out of client funds)

Total BG amount (out of prop funds)

Client

500

1000

500

500

500

CMPRO

500

1000

500

0

1000

TM PRO

500

1000

500

1000

0

Total to be reported

 

3000

 

1500

1500

 

7.      If a member is Clearing Member in one segment and Trading Member in other segments, then how reporting should be done?

ICCL: The reporting of BGs will be done only for those segments where member is registered as Clearing Member with ICCL. Where member is a trading member in a particular segment, the Clearing member of that trading member is required to report such details.

 

Members are advised to take note of the same.

 

For and on behalf of

Indian Clearing Corporation Limited

 

 

Roanna Lewis

Sr. Manager

Membership & Inspection