The Securities and Exchange Board of India (Sebi) has permitted bourses to introduce a new category of members in the derivatives segment called 'self-clearing members'.
A self-clearing member means a member of a clearing corporation or clearing house of the derivatives exchange or derivatives segment of a stock exchange who may clear and settle transactions on his own account or on behalf of his clients.
The member shall not, however, clear transactions of any other trading member.
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Self-clearing memberships also help the members to participate in derivatives trading through a lower net worth stipulation.
The minimum net worth requirement for the self-clearing member has been fixed at Rs 1 crore, apart from a deposit of Rs 50 lakh or higher with the clearing corporation or clearing house of the derivatives exchange exercised/ assigned, in addition to the 'annual turnover' computed on the basis of premium traded.
This is half the regular requirement of Rs 3 crore inclusive of deposit for the regular membership.
The Bombay Stock Exchange (BSE) is planning to throw open membership into this segment. Uptil now, derivatives exchanges had two types of members --trading, and clearing members.
BSE also had a new type of membership -- i.e. limited membership for its current cash segment players, but this ran into rough weather following objections by certain quarters.
Now with self-clearing memberships, bourses will be able to provide a low-cost avenue for trading and clearing derivatives trading.
This is a direct fallout of the recommendation of the Sebi committee on derivatives that various barriers in the market for different category of participants should be streamlined and standardised to the extent possible so to ensure equal access to all categories of investors.