>   Liquid Assets
Liquid Assets
1.1 Composition of Liquid Assets
The types of liquid assets acceptable by ICCL from the clearing members and the applicable haircuts and concentration limits are listed below:

 
Cash Component: Cash & Cash Equivalent
Eligible Collateral Hair-cut Remarks
Cash No haircut No Limit
Bank Guarantee ("BGs") No haircut Limit on the Exchange's exposure to a single bank as per the sebi stipulated norms.
Bank Fixed Deposits Receipts ("FDRs") No haircut No limit
Units of liquid Mutual Fund (or) Govt. Sec. Mutual Fund (by whatever name called which invests in government securities) 10% No limit
Central Government Securities 10% No limit
Non- Cash Equivalent
Eligible Collateral Hair-cut Remarks
Liquid (Group-I) Equity Shares (as per the prescribed criteria for classification of scrips on the basis of liquidity). VaR margin for the respective scrips Limit on exchange's exposure to a single issuer as per SEBI stipulated norms.
Mutual Funds (other than those listed under cash equivalent) VaR Margin  
Gold ETF 20%  
AA (or higher) rated Corporate Bonds 10% Not more than 10% of total liquid assets of the clearing member.
Bullion 20% Total commodities collateral for any clearing member shall not exceed 30% of the total liquid assets of the clearing member, out of which non bullion (presently not accepted) collateral shall not exceed 15% of the total liquid assets of the clearing member.



  • The cash/cash equivalent component should be at least 50% of the total liquid assets.
  • Hence, non-cash equivalent component in excess of the total cash/cash equivalent component would not be considered as part of Total Liquid Assets.
  • Further, the Liquid Assets deposited in form of cash equivalent and non-cash equivalent are subject to the norms in respect of applicable haircuts, single bank and single issuer exposure limits, etc. as per the guidelines issued by Securities and Exchange Board of India (SEBI), as well as any other circulars/guidelines that may be issued in respect of the same by BSE/ICCL from time to time.
  • Total commodities collateral for any clearing member shall not exceed 30% of the total liquid assets of the clearing member, out of which non bullion (Presently not accepted by ICCL) collateral shall not exceed 15% of the total liquid assets of the clearing member.
1.2 Minimum Liquid Asset/Net Worth
 
  • The Clearing Member shall meet with the minimum liquid assets requirements prescribed by ICCL at all points of time.
  • The Clearing Member's liquid net worth after adjusting all the margin requirements must be at least Rs. 50 Lakhs at all points in time.
  • Accordingly, every Clearing Member would be required to maintain Minimum Liquid Networth of Rs. 50 lakhs with ICCL. At least Rs. 25 lakhs of MLN should be in form of cash/Cash equivalent and the balance in form of Cash/Cash equivalent/non-cash equivalent.
1.3 Additional Liquid Assets
  Clearing members may deposit additional liquid assets at any point of time based on the composition of Liquid Assets as detailed in above.
1.4 Procedure for submission of deposits towards Liquid Assets
  Cash Deposits:



For enhancement of cash collateral towards liquid assets, the Clearing Members need to send their online instruction in respect of same through the on-line web-based facility CLASS Module to their respective Clearing Banks for confirmation of such request for enhancement of cash collateral.

Alternatively, in case of any contingency the Clearing Members and their designated Clearing Banks may at their discretion avail the facility of manual updations of cash collateral. For this purpose, the members may instruct their Clearing Banks to confirm the cash collateral deposits to the ICCL through written mode viz. Fax, letters or email. Based on such written confirmations received from the Clearing Banks, the cash collateral deposits of the members will be manually updated in the system by the ICCL.

Fixed Deposit Receipts (FDRs)


ICCL shall accept the instrument along with the letters if the same are in order and provide the benefit in respect of same to the concerned Clearing Member after confirming the details of the said instrument with the issuing bank.

  • Renewal of FDRs: Clearing Members may renew the FDRs deposited towards Liquid Assets by submitting a renewal letter from the concerned bank along with a covering letter by the Clearing Member in the prescribed format.

Bank Guarantee (BGs)

The BGs issued by Scheduled Commercial Banks may be deposited along with a covering letter of the Clearing Member in the prescribed format. ICCL shall accept the instrument along with the letter/s if the same are in order and provide the benefit in respect of same to the concerned Clearing Member after confirming the details of the said instrument with the issuing bank.

Clearing Members can deposit bank guarantee(s) with/without the claim period. In such cases i.e., where bank guarantee(s) are submitted without a claim period, the amount of the bank guarantee(s) would be removed from the liquid assets of the member at least seven days before the expiry date of the bank guarantee(s) or such other period as may be specified by ICCL from time to time.



  • Renewal of BGs: Clearing Members may renew the BGs deposited towards Liquid Assets by submitting a renewal letter from the concerned bank along with a covering letter by the Clearing Member in the prescribed format given to ICCL.
  • Facility of reminder emails on matured instruments:ICCL sends reminder emails providing details of the instruments getting matured in the near period to the email ids registered in the BEFS module. Clearing members are, however, advised to submit the renewal instruments within the stipulated period to avoid any hardship.

Eligible securities and MF units by way of pledge towards Liquid Assets Government of India Securities towards Liquid Assets

Clearing Members can deposit eligible securities and MF units in dematerialised form towards liquid assets by way of pledge. The list of eligible securities and units is available on BSE/ICCL web-site. These securities and units shall be pledged in favour of ICCL in the designated depository accounts.

The valuation of the securities and units deposited towards Liquid Assets shall be in accordance with the norms and limits as prescribed by ICCL from time to time. The value of the securities shall be subject to such haircut as may be prescribed by ICCL from time to time to arrive at the collateral value of the securities. The valuation of securities and units will be done on a periodic interval by ICCL and benefit to the extent of net value of the securities/units after haircut shall be considered. ICCL may revise the list of approved securities/units and the norms in respect of same from time to time. Clearing Members shall regularly monitor their valuation of securities/units lying towards Liquid Assets and replace/replenish the same based on the revised list of approved securities/units and change in norms.

Clearing Members shall also ensure that only eligible securities are pledged and lying towards their Liquid Assets with ICCL and that the said securities are not subject to any lock in period, buy back scheme any charge or lien, encumbrance of any kind, or such other limitations or title is questioned before the court or any regulatory body.


Procedure for pledging of demat securities/units towards Liquid Assets

Clearing Members need to execute a deed of pledge in favour of ICCL, for deposit of approved securities towards liquid assets with ICCL for the concerned segment in the prescribed format given in Annexure - IX.

The said deed of pledge should be: signed and stamped on all pages and where manual changes have been carried out by (i) Clearing Member in case of individual, (ii) all partners in case of a Partnership Firm (iii) by any two of the following persons (Managing Director, Whole-time Director, Directors) in case of a company.

Accompanied with a certified true copy of the Board Resolution, authorising the signatory to sign this deed, to be submitted in case of a company by authorized Signatory as approved by the Bank, in case of a Bank.

A covering letter of the Clearing Member enclosing details of the aforesaid and requesting for opening of a pledgee account of ICCL in whose favour the said demat securities/units towards Liquid Assets of the member shall be pledged. Clearing Members can initiate pledging of securities/units in favour of ICCL for deposit of same towards their Liquid Assets, and requisite benefits in respect of same will be available after receipt of confirmation of the pledge from the Depository system.


Procedure for pledging of Commodities towards Liquid Assets

Clearing Members can deposit vault receipts of approved commodities through the designated vaults approved/appointed by the Exchange towards additional deposits.

Clearing Members need to execute a deed of pledge in favour of ICCL, for deposit of approved commodities towards liquid assets with ICCL for the concerned segment in the prescribed format given in Annexure - IX. A single agreement is stipulated by ICCL for acceptance of securities/units/commodities towards liquid assets. The deed should be duly signed by the authorized signatory in the presence of minimum 2 witnesses.

Clearing member should submit an intention for marking commodity as collateral in the Collateral/Delivery module post confirmation of the receipt of commodity in the commodity collateral and delivery module and which is confirmed by the respective vault and ICCL.

Commodities will be valued at the closing price / settlement price of the previous day for the near month contract of the commodity.

Once the near month contract enters the tender period, rates of the immediate far month contract shall be considered for the purpose of valuation.

The valuation of the commodities will be done on daily basis and the valuation arrived at, will be subject to the commodity wise haircut to arrive at the eligible value of the collateral.


Government of India Securities towards Liquid Assets

Clearing Members may deposit eligible securities in form of Central Government of India Securities (G-Sec) and Treasury bills (T-bills). The list of such eligible securities shall be communicated by ICCL.Clearing Members shall ensure that only eligible G-sec and T- Bills are pledged and lying towards their Liquid Assets with ICCL and that the said securities are not subject to any lock in period any charge or lien, encumbrance of any kind, or such other limitations or title is questioned before the court or any regulatory body.
1.5 Procedure for submission of release request of Liquid Assets
  Clearing Members having active membership status can place their on-line request for release of Liquid Assets lying with ICCL by login through specific user-ids and passwords into CLASS collateral module provided to them. Such requests may be considered by ICCL, subject to no lien being exercised by ICCL pursuant to the applicable Rules, Byelaws and Regulations and subject to the availability of the collateral after adjusting for due fulfillment of all obligations and liabilities arising out of or incidental to any deals made by such clearing member/trading member or anything done in pursuance thereof.

Clearing Members can log in to the web-based CLASS Collateral Module and submit their release requests of collateral/s available collaterals for release.
1.6 Transfer of collateral from one trading segment to another trading segment
 


Clearing Members can transfer collateral across trading segments, online, to the extent of the amount of collateral lying unutilised towards margins or idle in the trading segment from which it is intended to be transferred.

Clearing Members can transfer collateral across trading segments, online, to the extent of the amount of collateral lying unutilised towards margins or ideal in the trading segment from which it is intended to be transferred.

In case of collateral lying in form of bank guarantees issued by banks the same would be available for transfer from one trading segment to another, only after submission of letter from the concerned bank regarding transfer of scope of the bank guarantee in the prescribed format to ICCL.

The evaluation of collateral transfer across the segments will be subject to hair-cut and other criteria/norms in respect of the concerned segments as specified by SEBI/BSE/ICCL in this behalf from time to time.

Clearing Members may verify the details of their request for transfer and its status in CLASS Collateral Module