|Borrowing Limits| Auction Market| Normal Market| CBLO Market Timing|
Borrowing Limit and Initial Margin
Borrowing limit for the members is derived based on mark to market values and hair-cuts applicable on securities deposited by that member in CBLO segment. The members can borrow up a maximum of Borrowing Limit including all amounts which are borrowed and outstanding at that point in time. Members are required to deposit initial margin generally in the form of Cash (minimum Rs.1 lac) and Government Securities. Initial margin is computed at the rate of 0.50% on the total amount borrowed/lent by the members. CBLO members may seek intraday enhancement of BL/ IM by depositing additional collaterals/ Government Securities/ Cash. Similarly, Members may withdraw securities intraday from CBLO segment provided they are unencumbered. However, one day prior notice is required for cash withdrawal.
Dealing
Auction Market
Auction market is available only to NDS Members having settlement a/c at RBI, for overnight borrowing and settlement on T+0 basis. Access to auction market is not available to Associate members. Based on the borrowing limits fixed by CCIL, members submit their borrowing requests to Clearcorp through CBLO System indicating clearly the amount, maturity and the cap rate before commencement of the auction session. Members are permitted to borrow and lend funds on overnight basis indicating the cap rate/s which is/are linked to CCBOR (a cap rate is the maximum rate up to which the borrower is willing to pay). Currently the permissible caps are:
a) CCBOR
b) CCBOR + 10 bps
c) CCBOR – 10 bps
d) No cap specified.
Clearcorp approves the requests of the members subject to availability of borrowing limit and places the same on the specified auction windows on behalf of the borrowing members. The lenders willing to lend place their bids directly on the respective auction window indicating the amount and the rate during the auction market session. At the end of the Auction market session, Clearcorp initiates auction matching process based on Uniform Yield principle. The successful borrowers and lenders are notified well before the close of business hours regarding borrowing and lending of funds by them through the dealing system.
Normal Market
CBLO Normal market is available to both CBLO (NDS) members and Associate members. The access to CBLO (NDS) members is made available through INFINET whereas Associate members are provided access through Internet. Members have to deposit Cash and/ or eligible securities prior to starting CBLO Dealing operations. The limits are made available to members based on cash / eligible securities deposited with CCIL for that purpose in CBLO Segment. CBLO Members can place borrow / lend orders till the closure of market hours for T+0 settlement type for the same day settlement and till closure of market hours for T+1 settlement type for settlement on next business day. The maturity or redemption date of CBLO can be identified from the nomenclature of CBLO itself which captures as part of the description the maturity or redemption date of CBLO. The CBLO are issued at par for a particular maturity date which implies that CBLO shall be redeemed at par. CBLO are traded in the secondary market at a discount to redemption or par value. The borrowing and lending orders match on Yield Time priority. The Borrow limit and Initial Margin are blocked on post trade basis and hence the onus is on the members to ensure prior to placing the order that sufficient BL and IM are available. Borrow order implies that the member is selling CBLO whereas Lend order implies that the member is buying CBLO.
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CBLO Market Timing
CBLO Normal Market is available for all members (including Associate Members) for settlement on T+0 and T+1 basis. CBLO Auction market is available for only for NDS members having settlement account at RBI and T+0 settlement type. The CBLO Normal market timing for settlement type T+0 and T+1 for various business days shall be as decided by Clearcorp and notified from time to time. The CBLO Normal market time for T+0 and T+1 valid now is available under notifications of Clearcorp Dealing Systems (India) Ltd.