Clearing houses of bourses can offer settlement services: Sebi

The Securities and Exchange board of India (Sebi) today clarified that clearing houses of stock exchanges are eligible for offering clearing and settlement services provided effective governance and risk management standards are followed.

The clarification came in the wake of a report saying that trades on exchanges can be settled only through recognised clearing corporations. Sebi's clarification is important as the Bombay Stock Exchange (BSE) has a clearing house.

It was decided in the Sebi board meeting held last week in Mumbai that central government would finalise the broad framework for clearing corporations' governance, bylaws and most importantly, divestment norms.

Based on these norms, Sebi will prepare regulations for clearing corporations. Clearing houses can also continue to do clearing but after adhering to governance and risk management norms which can be different for clearing house and clearing corporations.