Market regulator Sebi has granted qualified central counterparty status to National Securities Clearing Corporation, Indian Clearing Corporation and MCX-SX Clearing Corporation.
The QCCP status will make the three clearing corporations comply with the Principles for Financial Market Infrastructure (PFMI), an international standard to handle counterparty risk on derivatives, Sebi said in a statement issued today.
"These (clearing corporations) are also subjected, on an on-going basis, to rules and regulations that are consistent with the PFMI issued by the Committee on Payment and Settlement Systems (CPSS) and International Organisation of Securities Commissions (IOSCO)," Sebi said.
The international standards were issued in April 2012 and all G-20 nations were to required to adhere to these strict standards to check derivative-related risks in the financial system.
These rules were issued to enhance safety and efficiency in payment, clearing, settlement, and recording arrangements, and more broadly, to limit systemic risk and foster transparency and financial stability.
QCCP is an entity that is licensed to operate as a central counterparty (including a license granted by way of confirming an exemption) and is permitted by the appropriate regulator to operate as such with respect to the products offered.
Clearing Corporations undertakes the activity of clearing and settlement of trades in securities or other instruments or products that are dealt with or traded on stock exchanges.
Yesterday, Reserve Bank had granted QCCP status to Clearing Corporation of India.
