13:16 Sep 4, 2015
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1. What is ‘Collateralised Borrowing & Lending Obligation’ (CBLO)?
2. Which type of entities is granted membership to CBLO segment?
3. What is the difference between a Member and an Associate Member?
4. How can one obtain Membership of CCIL to CBLO segment?
5. How can one obtain Associate Membership of CCIL to CBLO segment?
6. Where does an Associate Member maintain its Current Account and GILT A/c?
7. What is CBLO Dealing System?
8. What are the modes of access to CBLO Dealing System?
9. What are the hardware / software requirements for CBLO Dealing System?
10. Who issues the Digital Certificates and what are the charges?
11. When can one start using the CBLO Dealing System?  
12. What are the charges payable for dealing and settlement in the CBLO Segment?
13. For which maturities are CBLO available in the CBLO market?  
14. What are the types of markets available under CBLO segment?
15. What is the minimum and multiple order lot size in CBLO Normal market?
16. What is meant by Single Order Limit (SOL)?
17. How is the consideration amount for the deal computed?
18. What would be the status of the outstanding orders when a member logs out from the system? 
19. What happens to the outstanding orders if the PC on which CBLO Dealer Terminal is installed abruptly shuts down? 
20. What are CSV reports? When are they generated? Where can they be saved?  
21. Is a member required to manually initiate the generation of Deal Tickets?
22. Can a member generate a particular deal ticket more than once?  
23. Can deals be uploaded from CBLO Dealing System in to the proprietary system of the Member?  
24. Can a member view its limits i.e. Initial Margin and Borrow Limit on the CBLO Dealing System?
25. When does a member get suspended on the CBLO Dealing system?
26. What happens to a member’s outstanding orders in case of intra day deactivation due to limit exceeding?
27. Can a Member who has breached his limits during trading deposit additional margin intra day to trade further?
28. Can a Member sell a CBLO in T+0 cycle which the member has bought in T+1 cycle the previous business day?
29. How does a member deposit securities? Can a member borrow against collateral deposited?
30. Can one withdraw / substitute the securities that have been deposited as Collateral?
32. Can one withdraw encumbered securities?
32. Is the title / ownership of the security transferred to lenders, as and when members borrow funds using the collaterals deposited by them?
33. How can a member contribute to Initial Margin?
34. How much Initial Margin is to be contributed by the members?
35. Can a Member deposit securities towards Initial Margin requirement?
36. Are members entitled to receive interest on the cash deposited towards Initial Margin?
37. What is Mark-to-Market Shortfall?
38. Where are the reports for CBLO segment made available?
39. Which Reports are made available to members by CCIL?



1.

What is ‘Collateralised Borrowing & Lending Obligation’ (CBLO)?

 

 CBLO
1.Is an RBI approved Money Market instrument;
2.Is an instrument backed by Gilts as Collaterals
3.Creates an Obligation on the borrower to repay the money borrowed along with interest on a predetermined future date;
4.A Right and Authority to the lender to receive money lent along with interest on a predetermined future date;
5.Creates a charge on the Collaterals deposited by the Borrower with CCIL for the purpose.

 


2.

Which type of entities is granted membership to CBLO segment?

 

Membership to CBLO segment is generally extended to Repo eligible entities as per RBI guidelines. CBLO Membership is granted to NDS Members and non NDS Members. The entity type eligible for CBLO Membership are Nationalized Banks, Private Banks, Foreign Banks, Co-operative Banks, Financial Institutions, Insurance Companies, Mutual Funds, Primary Dealers, Bank cum Primary Dealers, NBFC, Corporate, Provident/ Pension Funds etc.


3.

What is the difference between a Member and an Associate Member?

 

An entity which is eligible to maintain Current account and SGL account with RBI is called a Member in CBLO Segment. All other entities which are not eligible to maintain Current account and SGL account with RBI are referred to as Associate Members in CBLO Segment. However, in the ensuing FAQ, Members include Associate Members unless and otherwise specifically mentioned.


4.

How can one obtain Membership of CCIL to CBLO segment?

 

Eligible entities desirous of becoming Members to CBLO segment submit applications to CCIL and CCDS seperately along with two cheques of Rs 25000/- each favoring “The Clearing Corporation of India Limited” and “ClearCorp Dealing Systems (India) Limited”, towards one time membership fee. As soon as the applications for Membership is approved by CCIL and CCDS, the concerned members are required to execute legal documents like Power of Attorney, mandate in the prescribed formats, which will be forwarded by CCIL and CCDS. The above membership will be approved and valid for undertaking CBLO transactions through the trading system offered by CCDS and settling CBLO transactions through CCIL. (Note: Please refer to FAQs under ‘Membership’ for Eligibility Criteria and detailed description of procedure for obtaining membership.)


5.

How can one obtain Associate Membership of CCIL to CBLO segment?

 

Eligible entities desirous of becoming Members to CBLO segment submit applications to CCIL and CCDS seperately along with two cheques of Rs 25000/- each favoring “The Clearing Corporation of India Limited” and “ClearCorp Dealing Systems (India) Limited”, towards one time membership fee. As soon as the applications for Membership is approved by CCIL and CCDS, the concerned members are required to execute legal documents like Power of Attorney, mandate in the prescribed formats, which will be forwarded by CCIL and CCDS. The above membership will be approved and valid for undertaking CBLO transactions through the trading system offered by CCDS and settling CBLO transactions through CCIL. (Note: Please refer to FAQs under ‘Membership’ for Eligibility Criteria and detailed description of procedure for obtaining membership.)


6.

Where does an Associate Member maintain its Current Account and GILT A/c?

 

An Associate Member is required to maintain an exclusive Current Account for settlement of CBLO transactions with any one of the Settlement Banks designated by CCIL, .An Associate Member can maintain its GILT a/c with any custodian bank.  


7. What is CBLO Dealing System?

CBLO Dealing System is an automated order driven, on-line anonymous matching System provided by CCDS to enable Members to borrow and lend funds against CBLO. It also disseminates online information regarding deals concluded, volumes, rate etc., and such other notifications as relevant to CBLO market.

8.

What are the modes of access to CBLO Dealing System?

 
Members can access CBLO Dealing System through INFINET connectivity whereas Associate Members can access CBLO Dealing System through internet.


9.

What are the hardware / software requirements for CBLO Dealing System?

 

The hardware and software requirements for CBLO (NDS) Members and Associate members are given in CCIL website under sub menu ‘IT Infrastructure’ of CBLO.


10.

Who issues the Digital Certificates and what are the charges?

 

The hardware and softwareThe Digital Certificates are issued by IDRBT for CBLO (NDS) Members. The Digital Certificates for Associate Members is issued by NDS-IT on receiving a request from ‘Clearcorp’. As the onus of obtaining the Digital Certificates in respect of CBLO (NDS) Members rests with the member themselves, the member has to obtain the requisite Digital Certificate and submit it to Clearcorp / CCIL. Hence, no charges would be recovered from CBLO (NDS) Members for Digital Certificate. However, in respect of Associate Members, the Digital Certificate request will be sent by Clearcorp / CCIL based on a request received from Member. The charges applicable at that point in time shall be payable by Associate Members both in respect of Digital Certificate and E Token. 


11.

When can one start using the CBLO Dealing System?

 

 An Entity shall be provided access to the CBLO Dealing System only after cash deposit of Rs.1 lakh towards Initial Margin is received and his Membership to CBLO Segment is approved by Clearcorp and CCIL. An entity approved as a CBLO Member shall be provided a Member ID, Member Number and two User names which are unique within the member. The Member may request for customized User names and on receiving in appropriate format, the same shall be created by CBLO Admin. The User can access the CBLO Dealing System by logging in with User name (ID) and password communicated to him. The system would as part of password policy implemented by Clearcorp / CCIL, prompt the user to change the password immediately on his logging in to the system. 


12.

What are the charges payable for dealing and settlement in the CBLO Segment? 

 

The Trading and Settlement charges payable by member/s in CBLO Segment are available under notifications.


13.

For which maturities are CBLO available in the CBLO market?

 

CBLO instruments with maturity dates of next seven business days and immediate three month end dates are generally made available for settlement type T+0 and T+1.  


14.

What are the types of markets available under CBLO segment?

 

The market available to CBLO Dealing System Members is called the CBLO Normal market. CBLO Normal market facilitates borrowing and lending by members on an online basis by Clearcorp. The orders get matched in CBLO Normal market on Yield Time priority among the orders present at that point in time. 


15.

What is the minimum and multiple order lot size in CBLO Normal market?


The minimum lot size is the order size quantity below which system would not accept orders and multiple lot size is the lot size in which the system would accept orders, if the orders are above the minimum lot size. The minimum and multiple lot size for CBLO Normal market is Rs.5 lakhs. 


16.

What is meant by Single Order Limit (SOL)?

 

Single Order Limit is the maximum amount that can be entered by a member per order and it is applicable to each member of the CBLO Segment. 


17. How is the consideration amount for the deal computed? 

The consideration amount for the deal is computed based on the yield at which the deal is concluded based on the following formula. Consideration amount =Face Value/{1+ (yield/36500*holding period in days)}


18. What would be the status of the outstanding orders when a member logs out from the system?

When a Member logs off the system, the member is given an option to either cancel all outstanding orders or to retain the orders in the system.

19. What happens to the outstanding orders if the PC on which CBLO Dealer Terminal is installed abruptly shuts down?

The outstanding orders of the dealer, if any, remain in the order book.

20.

What are CSV reports? When are they generated? Where can they be saved?


CSV stands for Comma Separated Value. A .CSV is generated every time a print command is triggered for a Deal ticket or any report from Dealer Work Station(DWS). A .CSV is generated when a deal ticket automatically printed on conclusion of a trade. .CSVs is normally stored in the C drive of the PC wherein the DWS is logged in. However, facility is provided for members to configure the path to any folder in a common drive and once configured, all .CSVs will get stored automatically in the designated folder.


21.

Is a member required to manually initiate the generation of Deal Tickets?


Deal Tickets are automatically generated by the CBLO Dealing system after every trade and a hard copy is printed by the printer configured to the system.


22.

Can a member generate a particular deal ticket more than once?

A member can reprint a deal ticket any number of times by selecting the particular trade in the Previous Trades Query and clicking on PRINT. Members can also generate a summary report of all his trades by loading the Previous Trades Query and clicking PRINT.


23.

Can deals be uploaded from CBLO Dealing System in to the proprietary system of the Member?


Deals done on CBLO Dealing System cannot be directly uploaded in to the proprietary system of the Member directly from the database. The .CSVs are provided to Members precisely for this purpose. The .CSVs saved in the Member’s a folder in local or common drive can be utilised by the Member to upload in to their proprietary system through a utility developed at Member end for converting the .CSVs in to formats compatible with the formats in the Member’s proprietary system. 


24.

Can a member view its limits i.e. Initial Margin and Borrow Limit on the CBLO Dealing System?


Yes. Members can view their Available Trading Limits for the day, i.e., Available Initial Margin and Available Borrowing Limit on the CBLO Dealing System, in the ‘Check Limits’ screen under ‘Basic Data Query’. The member can also view his utilization after every trade and the updated status of his balance limit. Also, in case of intra-day deposits and withdrawals of collaterals the trading limits displayed in the screen are updated accordingly.


25.

When does a member get suspended on the CBLO Dealing system?


A member gets suspended on the CBLO Dealing system in automatically when the Initial Margin available for CBLO segment is insufficient to cover his traded positions.
A member may also be suspended by Clearcorp / CCIL for any reason which in the opinion of Clearcorp / CCIL warrants deactivation.


26.

What happens to a member’s outstanding orders in case of intra day deactivation due to limit exceeding?

 

On deactivation, all outstanding orders of that member automatically stand cancelled.


27.

Can a Member who has breached his limits during trading deposit additional margin intra day to trade further?

 

Yes, a member can deposit additional margin intra-day so as to cover his breached limits and trade further. A member is automatically suspended on the CBLO Dealing System in case Initial Margin limit is breached. On deposit of additional collaterals intra day towards Initial Margin such that the utilization is within the Initial Margin limit, the member is automatically re-activated on the CBLO Dealing System.


28.

Can a Member sell a CBLO in T+0 cycle which the member has bought in T+1 cycle the previous business day?

 

Yes. CBLO bought in T+1 settlement cycle in the previous business day can be sold in T+0 settlement cycle on the next business day.


29.

How does a member deposit securities? Can a member borrow against collateral deposited?

 

Members desirous of depositing securities are required to do so through ‘e-notice’ facility, the link to which is provided on CCIL’s web site. The transfer of securities through Value Free Transfer module of NDS from the Member’s SGL Account to the CSGL Account maintained by CCIL for CBLO Segment followed immediately by notice of intent in the prescribed format in ‘e notice’ is the process to be followed for deposit of securities for CBLO segment. In case of a CBLO Member not having an SGL account with RBI, such member need to advise their Custodian Bank with whom they maintain GILT account to transfer securities to CSGL account of CCIL. The ‘e notice’ for such deposits shall be given by the CBLO member who does not maintain SGL account with RBI. However, such ‘e notice’ shall be received through the Settlement Bank.
Members can deposit securities with CCIL during the day up to close of Trading session . The Borrowing limits are updated instantaneously on deposit of eligible securities in CBLO segment by a member following the extant process including ‘e notice’ and its confirmation at our end in ‘e notice’ as to the receipt of such securities in our CSGL account for CBLO segment. The limits that would get updated for borrowing are based on the MTM values of the securities deposits and haircut imposed on such securities.
(Note: Please refer to FAQs in the ‘e-Notice’ section for further details.)


30.

Can one withdraw / substitute the securities that have been deposited as Collateral?

 

Yes. Members can withdraw the unencumbered portion of securities deposited and also substitute securities that have been deposited as collateral either intra-day or at EOD for next day value. (Note: Please refer to ‘Collaterals and Margins’ section for further clarifications.)  


31.

Can one withdraw encumbered securities?

 

No. Securities blocked against outstanding borrowing cannot be withdrawn. The Withdrawal Request for such securities will be rejected by CCIL. However, members may withdraw such securities after depositing other eligible securities for the equivalent value.


32.

Is the title / ownership of the security transferred to lenders, as and when members borrow funds using the collaterals deposited by them?

 

The title / ownership of the securities remain with the borrowing members and the same are not transferred to lenders. However, the securities are blocked in the CSGL account to the extent of borrowing obligation completion of funds settlement. 


33.

How can a member contribute to Initial Margin?


 

Collateral contribution in cash shall be reckoned as Initial Margin. Members desirous of depositing Initial margin (cash) need affect a remittance to CCIL RTGS account and also communicate intent of such transfer giving details through ‘e notice’. The request received through e’ notice’ shall be accepted / approved by CCIL in ‘e notice’ on citing the funds in our RTGS account and on such approval / acceptance, the money transferred shall be reckoned as Initial Margin. (Please refer to FAQs under ‘e-Notice’ section for further clarification) . Members settling through settlement bank can deposit amount in CCIL’s current account with settlement bank.


34.

How much Initial Margin is to be contributed by the members?


Members and Associate members are required to deposit a minimum of Rs.1 lakh towards Initial margin. The minimum Initial margin deposit has to be strictly in cash only. Over and above this the Members/Associate members are required to deposit initial margin in advance at the rate of 0.50% of their trade volume.


35.

Can a Member deposit securities towards Initial Margin requirement?


Yes. A CBLO member has to deposit a minimum cash of Rs.1lakh towards Initial Margin. Members may over and above the minimum cash, contribute eligible securities towards Borrowing Limit(BL) and the BL to the extent utilised will be reckoned as Initial Margin.


36.

Are members entitled to receive interest on the cash deposited towards Initial Margin?

 

Members are entitled to receive interest at quarterly rests (at the end of every quarter) on the maximum daily utilization over and above minimum Initial Margin (cash deposit) stipulated for the segment. The minimum cash deposit stipulated for the time being in force is Rs.1 lakh.


37.

What is Mark-to-Market Shortfall?


The eligible securities deposited as collateral with CCIL for availing limits for CBLO Dealing, are subjected to Mark-to-Market valuation intra day or end of day on a daily basis as part of the EOD processes. When the value of the underlying collateral declines on account of mark-to-market valuation such that it is insufficient to cover the amount borrowed by the member in the CBLO segment, the difference between mark to market values of such collaterals and the amount borrowed is construed as mark-to-market shortfall occurs.


38. Where are the reports for CBLO segment made available?

All reports, both trading and settlement reports for CBLO segment are made available through the CCIL Report.


39.

Which Reports are made available to members by CCIL?

 

 The CBLO reports made available to members in Report Server on daily basis are:
a) Daily Transactions Report gives details of all the trades done by a Member for the day in both Auction and Normal Market;
b) Obligation Report for CBLOs and Funds gives CBLO wise pay-in / pay-out obligation and funds pay-in / pay-out for each member;
c) Settlement Report for CBLO and Funds;
d) Account Balance Report giving CBLO and Borrowing Limit balances;
e) Consolidated Funds obligation / settlement report;
f)Buy Back Report Reports for exceptional events;
g) Trade Loss Report;
h) Order cancellation Report; in the event the Member has requested CCIL to cancel its orders.
i) Intra-day Initial Margin Exceeding Report. In the event of CBLO and Funds shortage the following Reports are made available;
j) CBLO Shortfall and Replenishment Report;
k) CBLO Shortfall Penalty Report;
l) CBLO Allocation Compensation Report;
m) Fund Replenishment Report;
n) CBLO Shortfall Penalty Report;
o) Summary of Funds Settlement for CBLO & Securities segment.


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