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Liquid Assets

Liquid Assets

A clearing member may deposit liquid assets in the form of cash, bank guarantees, fixed deposit receipts and approved securities and any other form of collateral as may be prescribed by MCCIL from time to time. These total liquid assets are segregated as cash component and Non-cash component

Cash component

Cash component

Cash component comprise of Cash, Bank guarantees, Bank fixed deposit receipts, and Government securities, Treasury Bills and units of Liquid Mutual Funds or any other form of collateral as may be prescribed by MCCIL from time to time. The cash component shall be at least 50% of liquid assets. This implies that non cash component in excess of the total cash component would be excluded for computation of total liquid assets.

  • Cash - A Clearing Members may submit deposit in the form of cash by making the required amount available in their respective clearing bank account and sending an authorization to the Clearing Corporation/Clearing Bank for transferring said amount from their clearing account to the account of the clearing corporation. Clearing Corporation has provided an electronic interface to its clearing banks and Clearing members for enhancement of cash deposits towards margin requirement of clearing member. Members are also required to maintain Rs. 50 lakhs or 50% of the liquid assets whichever is lower in the form of cash deposits.
  • Bank guarantees - Clearing Members may submit Bank guarantees issued by approved banks in prescribed format towards liquid assets. List of approved banks and prescribed format is available on MCCIL website.

Limits for acceptance of bank guarantees

Following bank-wise and member-wise limits linked to the net worth of the issuing bank shall be applicable for acceptance of bank guarantees.

Type of Bank Member wise limits Aggregate Limits #
Non Clearing Bank 1% of Networth* 10% of Networth
Clearing Bank 1.5% of Networth** 15% of Networth

Note: Subject to an upper limit of Rs. 50, Rs.100 and Rs. 200 crores for SCM, TCM and PCM respectively.

Note: Subject to an upper limit of Rs. 75, Rs.150, and Rs.300 crores for SCM, TCM and PCM respectively.

Note: Subject to an upper limit of Rs.1500 crores for clearing bank and Rs.1000 crores for other approved banks.

Shifting of the Bank Guarantee from one segment to another:

Clearing member may request clearing corporation for transfer of bank guarantee submitted towards liquid assets in one segment to another segment. Transfer requests in this regard should be provided in the defined format available on website (mclear.in) In case the bank guarantee is issued by the bank for any specific segment, the clearing member needs to obtain an amendment letter from the issuing bank as per the format prescribed .

  • Bank fixed deposit receiptsClearing Members may submit Fixed Deposit receipts issued by approved banks towards liquid assets. Clearing members are required to submit lien letter and bank lien confirmation letter in prescribed format.

Shifting of the Fixed Deposit from one segment to another:

Clearing member may request clearing corporation for transfer of Fixed Deposit Receipt submitted towards liquid assets in one segment to another segment. Transfer requests in this regard should be provided in the format available for download on website of MCCIL

  • Government Securities (G-Sec) & Treasury bill (T-Bills)Clearing Member/Custodian desirous of providing G-Sec/Treasury Bill shall enter into an agreement with MCCIL as per the specified format. Clearing Corporation shall prescribe list of G-Sec/T-Bills that shall be eligible for acceptance as collateral from time to time. Both the above liquid assets shall be accepted as collateral only in electronic form.
  • Units of Liquid Mutual FundsClearing Members may deposit Open Ended Liquid Mutual Funds Units available in dematerialized form pledged in favour of MCCIL with approved custodian towards liquid assets. The valuation of units of the mutual funds shall be done daily using NAV (Net Asset Value) of the mutual fund scheme with a haircut of 10% plus Exit Load, if any.

Non-cash component

All other forms of collateral deposits like deposit of approved list of demat securities and units of the other mutual funds and any other form of collateral as may be prescribed by MCCIL, from time to time.

Securities as Collaterals

Clearing Members can submit securities approved by MCCIL in demat form with the approved custodian(s) for the purpose of additional deposit. Securities can be submitted as collaterals through approved custodian for which Clearing Members may have to comply with the terms of the custodians. Securities shall be accepted towards liquid asset of the clearing members, subject to the limits defined by clearing corporation. The scheme for depositing approved securities (Equity Shares and Exchange Traded Fund) in electronic form), is as under:

Equity shares and Exchange Traded Funds (ETFs) as collateral:

  • Clearing Members can deposit equity shares of approved companies and ETFs in electronic form ('Demat securities') in the designated depository accounts maintained by the Custodian(s) approved/appointed by the MCCIL in this regard. These securities shall be pledged in favour of MCCIL.
  • The securities shall be subject to a minimum margin / hair cut as specified by MCCIL from time to time.  The custodian does the valuation of the said securities pledged after applying the hair cut specified.
  • MCCIL may issue / revise the list of approved securities and the margin / haircut requirements from time to time.
  • The securities will be accepted from a Clearing Member with the upper limits (Net of haircut) as will be decided by MCCIL, from time to time.
  • In case of discontinuation of a security from the list of approved securities, the valuation of such securities will be reduced from the additional security deposit. In such case, Clearing Members are advised to replace such security with eligible securities within two working days.

Ownership of Securities:

  • The securities that may be deposited shall be subject to the beneficial ownership of the Clearing Member, any of the partners or any of the directors of the Clearing Member, in case of individual, partnership or corporate members respectively as the sole/first joint holder, provided no depositor of securities shall be a minor as on the date of deposit thereof.
  • In case of reconstitution/restructuring or any such change in the partners/directors of the Clearing Member, as applicable, a Clearing Member shall be required to replace the securities belonging to such outgoing partners or directors solely or jointly, as the case may be, immediately and no benefit shall be given for such securities towards Additional Margin Deposits or such similar requirements

Securities not acceptable:

  • Securities not as per the approved list;
  • Partly paid up securities;
  • Securities subject to any lock in period, buy back scheme, any charge or lien, encumbrance of any kind or whose title is questioned before a Court or any regulatory body or such other limitations.

Opening of accounts:

  • Clearing Members are required to open a separate demat account with the approved custodian(s) of MCCIL for depositing securities.
  • For this purpose, Clearing Members, who are individuals, may open an account in their name if securities offered are held in their names. Clearing Members who are a partnership firm may open an account in their partners' names if securities are held in the names of the partners as the case may be, and Clearing Members who are corporate body may open an account in the corporate name or in the name of their designated directors as the case may be depending upon the beneficiary of securities. However, these accounts are required to be separate and used for the purpose of such deposit of securities only.
  • Clearing Members who are interested in availing of this facility may get in touch with the officials of the approved Custodian(s) to ascertain the modalities with regard to deposit of securities.

Marking of pledge:

Clearing Members along with joint holders, if any, may deposit dematerialized securities with the custodian by marking a pledge of the securities in favour of MCCIL. In addition to any document as may be required by the approved custodian(s) in this regard, the following documents are required to be provided to the approved custodian(s):

  • Deed of pledge is to be executed in the format prescribed by the MCCIL and available with the approved custodian(s) on a non-judicial stamp paper of Rs.200/-
  • Certified true copy of the relevant Board Resolution in case of a corporate body.
  • Clearing Members and the joint holders, if any, shall give the necessary pledge instruction(s) to the approved Custodian for the securities to be pledged in favour of MCCIL. Once the securities are accepted and duly pledged by the approved Custodian, the approved Custodian shall inform MCCIL the value of the securities after adjusting the relevant margin percentages / haircut as stipulated by MCCIL and the same shall be considered as additional margin deposit.

Release of Collaterals: MCCIL may consider the request for release provided:

  • Such Clearing Member has no outstanding obligations / positions / dues towards MCCIL if any, and that there is no other liability under the Rules, Bye-Laws and Regulations of MCCIL, and
  • MCCIL is of the opinion that such release does not entail any risk.

The web based facility of My Exchange is provided for submission of release requests of collaterals. The members may select the desired available collaterals for release.

Minimum Deposit Requirement

Every clearing member of the Clearing Corporation in Equity Derivatives segment is required to maintain Minimum Deposit in the following manner.

Cash Deposit Cash Equivalent Deposits @
For Clearing Member Rs. 25 Lakhs Rs. 25 Lakhs
For every additional TM under the Clearing Member Rs. 1 Lakh Nil

Every clearing member of the Clearing Corporation in Currency Derivatives segment is required to maintain Minimum Deposit in the following manner.

Cash Deposit Cash Equivalent Deposits @
For Clearing Member Rs. 25 Lakhs Rs. 25 Lakhs
For every additional TM under the Clearing Member Rs. 50 Thousand Rs. 50 Thousand

Note: @ Cash Equivalent Deposits for the above purpose would include Cash, Bank Guarantee, Bank Fixed Deposits and Government Securities.

Formats for acceptance of collaterals

Cash

Type

Description

Submitting Base Minimum Capital (BMC)/Additional Deposit/ Additional Base Capital (ABC) (Cash collateral)
Format of Letter for Release of Base Minimum Capital (BMC)/Additional Deposit/ Additional Base Capital (Cash)
Bank Guarantee (BG)

Type

Description

Bank Guarantee format for Base Minimum Capital (BMC)/Additional Deposit/ Additional Base Capital (ABC)
Renewal of Bank Guarantee format for Base Minimum Capital (BMC)/ Additional Deposit/ Additional Base Capital (ABC)
Format of Letter for release BG / FDR given towards Additional Deposit/ Additional Base Capital (ABC)
List of approved Banks
Fixed Deposit Receipt (FDR)

Type

Description

Format of Letter Confirming the Lien on Fixed Deposit Receipt
Letter from the Bank confirming the Lien on Fixed Deposit Renewal towards Additional Margin Where the FDR no. changes
Letter from the Bank confirming the Lien on Fixed Deposit Renewal towards Additional Margin Where the FDR no. does not change
Format for submission of BG / FDR towards /Additional Deposit/ Additional Base Capital (ABC)
List of approved Banks
Securities & Mutual Funds

Type

Description

Format of Deed of Pledge for Members for Deposit of Securities
Letter to be given by the Member for Release of Securities kept as Additional Deposit / Additional Base Capital (Securities)
Letter for deposit of securities for additional base capital

Procedure & Formats for Acceptance of G-Sec and T-Bills towards Liquid Assets

Procedure for Acceptance of G-Secs and T-Bills towards Liquid Assets

SGL Mode:

  • The Clearing Member (CM) who intend to provide G-Sec/T -Bills as liquid assets shall enter into an agreement with Metropolitan Clearing Corporation of India Ltd. (MCCIL) as per the format specified.
  • The list of G-Sec/T -Bill eligible for acceptance as collateral will be prescribed from time to time by MCCIL.
  • The G-Sec/T-Bill shall be accepted only in dematerialised form. Hence, the clearing members who intend to tender G-Sec/T-Bill as collateral shall send their request to MCCIL Mumbai, as per the format specified. The member shall further be required to enter the transaction through their custodian/bank on e-Kuber Online RBI Portal under Margin Transfer before 4.00 pm. MCCIL shall confirm the transaction entered on the e-Kuber Online RBI Portal, based on the information received from the member.
  • The details of CSGL account of MCCIL are as follows:
    • Name of the Account: Metropolitan Clearing Corporation of India Ltd.
    • SGL Account Number: 00621100003/ SG159164
  • The clearing members as and when required shall send a request for release of G-Sec / T-bills to in the format specified. The release of G-Sec/T-Bill shall be processed only at the end of day. The G-sec/T-bill released by MCCIL shall be entered on e-Kuber Online RBI Portal under Margin Transfer. The members shall ensure that such transactions are approved on e-Kuber Online RBI Portal by their Custodian/Bank.
  • Any benefits / periodic coupon / redemption payments received on the G-Sec/T -Bills which were transferred by members into the SGL account of MCCIL shall be distributed / passed on to the relevant members by MCCIL upon receipt from Reserve Bank of India.
  • In case any of the approved G-Sec is in ‘SHUT PERIOD’, the members shall not be allowed to request for addition / release of such G-Sec.
  • Valuation shall be done on a daily basis using FIMMDA prices. A haircut of 10% shall be applied on the value of G-Sec/T-Bill provided as collateral by the clearing member. The value after applying the hair cut shall be added to the cash component of the liquid assets of the member.

Depository Pledge Mode:

  • The Clearing Member (CM) who intend to provide G-Sec/T -Bills as liquid assets shall enter into an agreement with Metropolitan Clearing Corporation of India Ltd. (MCCIL) as per the format specified.
  • Members who are interested to place approved securities i.e. T-Bills, G-Secs as collaterals in demat form in pledge mode may get in touch with the approved custodians of the Clearing Corporation. The contact details of the approved custodians are given below.
  • The list of G-Sec/T -Bill eligible for acceptance as collateral will be prescribed from time to time by MCCIL.
  • The clearing members as and when required shall send a request for release of G-Sec / T-bills to in the format specified. The release of G-Sec/T-Bill shall be processed only at the end of day. The G-sec/T-bill released by MCCIL shall be forwarded to custodian to unmark the pledge.
  • In case any of the approved G-Sec is in ‘SHUT PERIOD’, the members shall not be allowed to request for addition / release of such G-Sec.
  • Valuation shall be done on a daily basis using FIMMDA prices. A haircut of 10% shall be applied on the value of G-Sec/T-Bill provided as collateral by the clearing member. The value after applying the hair cut shall be added to the cash component of the liquid assets of the member.

List of Custodians for acceptance of Securities as Collaterals

Stock Holding Corporation Ltd.

SHCIL House, Plot No. P-51, T.T.C. Industrial Area, MIDC, Mahape, Navi Mumbai - 400 710

  • Contact Details
  • Mr. Ganesh Zodge
  • Deputy Manager
  • +91 022 2778 5532
  • +91 022 6177 8533

HDFC Bank Ltd.

Custody & Depository Services Lodha – I Think Techno Campus, Building - Alpha, 8th Floor, Opp, Crompton Greaves, Kanju Marg (E), Mumbai - 400 042

  • Contact Details
  • Mr. Jagdish Bhatia
  • Assitant Vice President
  • +91 022 3075 1233
  • +91 022 3050 7345
Formats for acceptance/release of G-Sec/T-bills

Type

Description

Letter to be given by the member for request of G-Sec / T-bills addition-SGL mode
Letter to be given by the member for request of G-Sec / T-bills release-SGL Mode
Letter to be given by the member for request of G-Sec / T-bills addition-Depository pledge mode
Letter to be given by the member for request of G-Sec / T-bills release-Depository pledge mode
e-Kuber Screen Snapshot
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The company was incorporated on November 7, 2008 and was permitted by SEBI to undertake clearing and settlement functions of trades done in MSE on January 2, 2009. The company commenced its operations on February 16, 2009.

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