BSE, ICCL implement interoperability framework for clearing corporations

BSE and Indian Clearing Corporation Ltd (ICCL) have implemented interoperability framework with effect from Monday as mandated by markets regulator Sebi, according to a statement by the exchange.

"BSE and ICCL had deployed the new interoperability system on Saturday, June 1. Monday was the first trading day after implementation of interoperability and during the day, ICCL received and cleared multiple trades from BSE and Metropolitan Stock Exchange," the bourse said in a statement.

To ensure that the transition to interoperability is seamless and non-disruptive, it was jointly decided by exchanges and clearing corporations that members can choose a functional date for going live with interoperability on any Monday from June 3, 2019 till July 1, 2019.

Sebi last year came out with a framework for interoperability among clearing corporations (CCPs) with an aim to reduce trading costs.

The interoperability permits trading members to clear trades through a firm of their choice instead of going through the CCP owned by the bourse on which the trade was executed.

Commenting on interoperability, Ashishkumar Chauhan, MD and CEO, BSE said, "It will reduce the requirement for funds as well as reduce risk on the overall system when all the stock exchanges and clearing corporations become interoperable making Indian stock market more robust.

As many as 15 clearing members at ICCL opted for interoperability to be effective from June 3, 2019 and ICCL cleared trades for such members executed on exchanges that were connected to the interoperability framework, the statement said.

Devika Shah, MD and CEO, ICCL said, "Interoperability will bring down cost of clearing substantially for members with netting benefits, bring efficiency in margins, collateral, clearing and settlement, while bringing down the systemic risk."