Sebi rejigs advisory panels on clearing corp, risk management

Six-member panel on clearing corporations is headed by K V Kamath, while 10-member committee on risk management review is chaired by IIM Ahmedabad Professor J R Varma

Market regulator Sebi has reconstituted two of its key advisory committees, which are mandated to give suggestions on regulation for clearing corporations and risk management review system.

The six-member panel on clearing corporations is headed by ICICI Bank Chairman K V Kamath, while 10-member committee on risk management review is chaired by IIM Ahmedabad Professor J R Varma.

The two committees have been revamped after departure of Sebi Executive Director S Raman, who was also a member of both the panels.

Securities and Exchange Board of India (Sebi) Executive Director S V Murali Dhar Rao is now a member on two committees.

The changes in clearing corporations comes at a time when payment crises surfaced at National Spot Exchange Ltd (NSEL) and technical glitch was seen at the US bourse Nasdaq.

Clearing corporation committee is assigned to see the viability of introducing a single Clearing Corporation (CC)or interoperability between different CCs.

It is mandated to examine and review the existing regulation of transfer of profits every year by the bourses to CCs and the committee is also given task of defining 'the liquid assets' of CCs for the purpose of calculation of net worth among others.

The panel on risk management system would review the risk management framework for the cash and derivatives segment and recommend the changes if required.

Among other functions of the panel included outlining the investor protection measure in the stock exchanges, consider and suggest measures in reducing transmission of risk from other segments.

Other members of clearing corporation are G Padmanabhan RBI Executive Director (Department of Information and Technology and Department of Payment and Settlements and Foreign Exchange), IIT Mumbai professor Deepak Pathak and IIM Bangalore professor V Ravi Anshuman and B Sambamurty Director at Institute for Development and Research in Banking Technology (IDRBT).

Among other members of risk management review committee included MCX-SX Clearing Corporations Vice President Balu R Nair, National Securities Clearing Corporation Senior Vice President R Sundararaman and BSE Chief Regulatory Officer Nehal Vora.