India Delays CCP Interoperability Framework

Trading members have been given one more month to develop processes that allow them to choose to clear and settle trades in other clearing corporations.

NSE and BSE have given a one month extension to clearing members to complete developing and testing a clearing corporation interoperability framework that was due to take effect on 1 June 2019.

Clearing members now have until 1 July 2019 to comply with a November 2018 guideline from SEBI (the Securities Exchange Board of India), which allows trading members to choose a clearing corporation of their choice rather than those owned by the stock exchanges.

Currently, trades on either the NSE or BSE are cleared and settled through their own clearing houses.

“Interoperability among CCPs necessitates linking of multiple clearing corporations. It allows market participants to consolidate their clearing and settlement functions at a single CCP, irrespective of the stock exchange on which the trade is executed,” the SEBI circular had said.

SEBI had further said that exchange transaction charges be clearly identified and made known to trading members upfront in order to promote transparency.

The two exchanges said in their statements that while a large number of clearing members had updated their systems and processes to implement interoperability, “a few market participants have expressed that they are still in the process of developing and testing their systems and processes and need more time to move to the interoperable framework.”

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