Sebi issues rules for inspection of warehouses by clearing corporations

Capital markets regulator Sebi on Wednesday simplified guidelines on the requirement of inspection of warehouses by clearing corporations.

In its circular, Sebi said that the requirement of two inspections in a calendar year can be done away with for accredited storage facilities with 'nil' stock, continuously during the preceding six months.

In these cases, the number of inspections by an independent agency can be limited to once in a calendar year, it added.

With no stocks for the entire year, the regulator said that no independent inspections are needed. Before accepting new deposits, facilities with no inspections in the previous year must comply with in-house inspection requirements.

 

This decision is aimed at streamlining the inspection process and reducing unnecessary inspections for facilities without stocks, promoting ease of doing business while ensuring readiness and compliance.

Under the current rules, there is a requirement for clearing corporations to conduct independent audit of the goods and other facilities in the storage facilities by engaging expert agencies, at regular intervals.

As per the present rule, clearing corporations must conduct independent audits of goods and facilities in storage at least twice a year. Further, inspections should be spaced no more than six months apart. If there are no stocks in a storage facility for the preceding six months, inspections are not required.

In a separate circular, Sebi has put in place norms for acceptable collateral and exposure for clearing corporations (CCs).

This is aimed at further strengthening the risk management framework of CCs.

Sebi has been specifying norms for risk management of CCs, including acceptable liquid assets by CCs with applicable haircuts to meet the requirements for initial margins, mark to market losses, value at risk margins, extreme loss margins, base minimum capital.

Also, the regulator tweaked investor charter for stock exchanges, depositories and depository participants detailing the services provided to investors, their rights as well as responsibilities, code of conduct for these entities and grievance redressal mechanism.

In addition, the regulator has modified guidelines pertaining to 'Dos and Don'ts for investors.

This has been done keeping in account the recent developments in the securities market including introduction of Online Dispute Resolution (ODR) platform and SCORES 2.0-- a web-based centralised grievance redressal system.