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What is Settlement Guarantee Fund (SGF)?
Securities Settlement - Settlement Guarantee Fund is a dedicated fund comprising of contributions by members of CCIL’s Securities Segment to meet their margin obligations as prescribed by CCIL from time to time. The members’ contributions to SGF are expected in the form of cash and securities as prescribed from time to time.
Forex Settlement - Members of CCIL Forex Segment are required to contribute their margin obligations to CCIL’s dedicated SGF maintained for its Forex Segment in accordance with the advices by CCIL from time to time. Such contribution is a factor of the concerned Member’s Net Debit Cap. Forex Segment SGF contribution is currently payable in the form of US Dollar funds only.
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| 2. |
Can the SGF comprise of only securities?
SGF contributions in the form of Securities are accepted for CCIL’s Securities Segment. Even here, it can only form part of the total SGF contribution. Currently CCIL has stipulated a cash:securities SGF composition ratio of 10:90 of the margin requirements for its Securities Segment and 5:95 of the margin requirement for Forex Forward Segment. For CLS Segment no Cash: Securities composition has been prescribed.
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| 3. |
Can the SGF comprise of only Cash?
Yes, a member can contribute its entire SGF contribution by way of cash in CCIL’s Securities Segment.
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| 4. |
What about the margin for CBLO Segment?
Members of CCIL’s CBLO segment are required to maintain margin contributions in relation to their borrowing / lending obligation at any point of time. Collaterals can be in form of both cash and securities. Cash and security contributions are reckoned towards members’ initial margin obligations and/or computation of borrowing limits as applicable.
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What are the securities eligible for contribution to SGF/CBLO Margins?
CCIL prescribes separate lists of securities that are eligible for margin contributions by members for its Securities and CBLO Segments respectively.
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| 6. |
How can a member inform CCIL about Deposits / Withdrawals to / from SGF/CBLO Margins?
Any member desirous of making deposits / withdrawals from its SGF holding is required to notify CCIL suitably either using the eNotice System or a Physical Notice in the prescribed format within the specified cut off timings. CCIL has advised its Members of the work processes in regard to both deposits and withdrawals of margin/collateral contributions in respect of each of its business segments.
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| 7. |
How will the transfer of Securities take place in case of Deposits to SGF/CBLO Margins?
All transfer of securities to CCIL by its members is carried out on a “Value Free of Payment” basis. Deposit of securities by members is carried out electronically using the relative functionality in RBI’s NDS. A securities transfer request is created and approved by a member/Settlement Bank/ Custodian. The same is confirmed by CCIL and forwarded to RBI for settlement. Transfer of securities take place between the respective SGL/CSGL Accounts maintained at RBI PDO.
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| 8. |
How will the transfer of Securities take place in case of Withdrawal from SGF/CBLO Margins?
Security withdrawals are permitted after considering concerned members outstanding trade obligations. The transfers are achieved electronically using relative functionality provided in RBI’s NDS. A securities transfer request is created and approved by CCIL. The same is confirmed by the member/Settlement Bank / Custodian and forwarded to RBI for settlement. Transfer of securities take place between the respective SGL / CSGL Accounts maintained at RBI PDO.
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| 9. |
How will transfer of Cash component of SGF/CBLO Margins take place?
Cash contributions are received in CCIL’s RTGS Settlement Account with RBI from members settling their funds obligation at RBI. Other members need to credit the funds to CCIL’s specified Current Account(s) with Settlement bank. Such fund transfers can be made using the RTGS System of RBI or Net Banking System(s) of relative Settlement Bank. The cash collateral contributions and withdrawals are expected to be in multiples of Rs.100,000.
Members seeking to withdraw the cash component from Securities Segment SGF or CBLO Cash Collateral , will receive payment by direct credit to their RTGS Settlement / Current Account maintained with RBI / Settlement Bank on relative Value Date of Payment. For this purpose the account details recorded with CCIL for settlement of funds obligation shall be taken into consideration.
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| 10. |
Will the member be eligible for corporate actions and benefits on the securities contributed to SGF/CBLO Margins?
Yes, all corporate actions on member SGF/CBLO Collateral holdings are serviced through the RTGS System of RBI and Net Banking System (s) of relative Settlement Bank. The relative funds are credited to the RTGS Settlement / Current Account of the concerned member with RBI/Settlement Bank under separate individual electronic advices to the concerned member.
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| 11. |
Will the member be eligible for interest on the cash contributions to the SGF/CBLO Margins?
In the Securities Segment, members are not entitled to any interest on their cash contributions to the SGF, except for the Members contributing entire SGF in cash. In respect of members holding their entire SGF contribution in form of cash, CCIL pays interest to such members at quarterly rests at a spread below 91 day Treasury bill primary auction yields. Interest is also paid on cash collateral contribution utilized towards margin requirement in Forex Forward Segment.
In the case of CBLO Segment, cash collateral(s) utilized towards Initial Margin requirement in excess of Rs. 100,000.00 attract interest payment on the cash utilization (in excess of the prescribed minimum) at the same rate as applicable to the cash holdings in CCIL’s Securities Segment.
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| 12. |
How are SGF contributions received for CCIL’s Forex Segment?
Members of CCIL’s Forex Segment are required to contribute to their SGF for Forex segment in US Dollars only. Individual member contribution requirements towards SGF are advised by CCIL to the members. Members are required to remit USD fund contributions to the SGF to CCIL’s dedicated USD Nostro Current Account maintained with Royal Bank of Scotland New York, USA after giving prior notice to CCIL in the prescribed format.
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| 13. |
How are SGF balances refunded to members of CCIL’s Forex Segment?
SGF withdrawals sought by members of CCIL’s Forex Segment, once approved, are refunded by remittance of relative funds to concerned member’s USD Nostro Current Account with its Correspondent Bank under separate electronic advice to the concerned member.
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| 14. |
Are members of CCIL’s Forex Segment entitled to any interest on their SGF contributions?
Yes. SGF contributions received are invested by CCIL in US Treasury Bills and the income earned is passed on to all members net of costs at half yearly rests. The income is distributed amongst members in proportion to the tenor and quantum of individual SGF balances. Interest is paid in US Dollars by credit to members’ US Dollars Nostro Current Accounts with their Correspondents.
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| 15. |
How can the members obtain/view their holding statements, reports etc.?
All reports are electronically delivered by CCIL to its members through its Report Browser.
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