Sebi lets clearing members contribute to Core SGF via G-Secs

Market regulator Sebi today allowed clearing members to contribute to the Core Settlement Guarantee Fund in the form of central government securities.
Earlier, contributions by clearing members to the Core SGF (Settlement Guarantee Fund) were permitted in cash and bank fixed deposits.
"The clearing members shall be permitted to bring their contribution towards the Core Settlement Guarantee Fund in the form of central government securities, in addition to cash and bank fixed deposits," the Securities and Exchange Board of India (Sebi) said in a circular.
In 2014, Sebi created the Core SGF within the Settlement Guarantee Fund, which is readily and unconditionally available to meet settlement obligations of clearing corporation in the event of clearing members failing to honour settlement obligation.

The regulator has asked clearing corporations to take "necessary steps" to put in place systems for implementation of the norms, including necessary amendments to the relevant bye-laws, rules and regulations.