Sebi issues guidelines for winding down of clearing corporations

Rules will apply when a clearing corporation strategically wants to wind down, or has incurred losses or there is some regulatory action against it

The Securities and Exchange Board of India (Sebi) has laid down guidelines for orderly winding down of critical operations and services offered by clearing corporations. These entities will be allowed to wind down operations if they have taken a strategic decision to do so, or if there are losses due to defaults on the part of clearing members, or other factors. They will also be allowed to wind down in case of regulatory action.

Under the standing operating procedure (SOP), a notice will have to be issued by the clearing corporation with prior approval from Sebi in case a scenario