Sebi tweaks SOP in case of defaults by trading and clearing members

Sebi on Friday tweaked the standard operating procedure specifying steps to be taken by stock exchanges, clearing corporations and depositories for dealing with possible defaults by trading or clearing members.

The measures are aimed at protecting the interest of non-defaulting clients of trading members (TMs) or clearing members (CMs) in the likely event of default.

Sebi, in consultation with the Market Infrastructure Institutions, has decided to modify the framework in order to provide equitable distribution of funds amongst investors, according to a circular. Under the new framework, within 30 trading days from crystallisation of balances, stock exchanges (SEs) or clearing corporations (CCs) will have to endeavour to settle the claims of maximum number of clients by way of interim measures under their supervision, prior to issuing show cause notices.