CIRCULAR

SEBI/HO/MRD2_DCAP/CIR/2021/0598 July 20, 2021

To

All Recognized Clearing Corporations

All Recognized Stock Exchanges

Dear Sir/ Madam

Segregation and Monitoring of Collateral at Client Level

1. SEBI, vide circular no. SEBI/HO/MIRSD/DOP/CIR/P/2020/28 dated February 25,

2020, put in place a framework of ‘Margin obligations to be given by way of Pledge/
Re-pledge in the Depository System’ to mitigate the risk of misappropriation or
misuse of client’s securities available with the Trading Member (TM) / Clearing
Member (CM) / Depository Participant (DP), including use of one client’s securities
to meet the exposure, margin or settlement obligations of another client or of the
TM / CM.

2. In order to further strengthen the mechanism of protection of client collateral from

(i) misappropriation/ misuse by TM/ CM and (ii) default of TM/CM and/or other
clients, SEBI issued a consultation paper on May 10, 2021 requesting market
participants to provide their comments/ views on the proposed framework for
segregation and monitoring of collateral at client level.

3. In light of the public comments and discussions with the stakeholders, it has been
decided to adopt the following framework for segregation and monitoring of
collateral at client level.

Reporting Mechanism by TMs and CMs

4. With a view to providing visibility of client-wise collateral (for each client) at all levels,
viz., TM, CM and Clearing Corporation (CC), a reporting mechanism, covering both
cash and non-cash collateral, shall be specified by the CCs. Details in respect of
the same are as under:

a. The reporting structure shall entail disaggregated information (segment-wise

and asset type wise break-up) of each client collateral in the following manner:

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  TM shall report disaggregated information on collaterals up to the level
of its clients to the CM.
 CM shall report disaggregated information on collaterals up to the level
of clients of TM and proprietary collaterals of the TMs to the Stock
Exchanges (SEs) and CCs in respect of each segment.

b. The details to be submitted in the report shall essentially cover the following
information, in order to provide a holistic view of the entire client collateral at
various levels up to the level of CC:

TM  CM CM  SE & CC
Client collateral received by TM Client collateral received by TM
Client collateral retained by TM Client collateral retained by TM
Client collateral placed with CM Client collateral placed with CM
Client collateral retained by CM
Client collateral placed with CC

c. The aforementioned information shall be required to be reported on a daily

basis.
5. A web portal facility shall be provided by the CCs/ SEs to allow clients to view
aforesaid disaggregated collateral reporting by TM/CM.

Collateral Deposit and Allocation

6. In case of securities collateral provided to CC through margin pledge/re-pledge in

the Depository system, CC has visibility of the client to whom such securities belong
to, and accordingly is able to assign the value of the securities collateral, based on
applicable haircut, to that client’s account.

7. Similarly, for other forms of collateral placed with the CC, the CCs shall provide a
facility to CMs for upfront segment-wise allocation of collateral to a TM/ client or
CM’s own account. The CCs shall use such collateral allocation information to
ensure that the collateral allocated to a client is used towards the margin obligation
of that client only.

8. There shall be no change in the procedures pertaining to placing of securities as

collateral through the margin pledge/re-pledge mechanism in the Depository
system, and this collateral will be identified as belonging to a client or as being
proprietary securities of the TM or CM, as the case may be, as per the existing
procedures.

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9. While depositing other forms of collateral i.e. Cash, Fixed Deposits (FDs), Bank
Guarantees (BGs) or Government Securities provided through the SGL/CSGL
route, etc, the CM shall allocate these collaterals into proprietary account of CM,
and/or proprietary account of any TM clearing through the CM, and/or account of
any of the clients (including Custodial Participants (CPs)) clearing through the CM,
and/or of any of the clients trading through the TM who in turn is clearing through
the CM, segment-wise.

10. In case of such collateral received by the CM from any TM, the CM shall not accept
the same without the TM specifying break-up of such collateral into proprietary
account of the TM and/or uniquely identified client account. Similarly, the CC shall
not accept such collateral without the CM specifying appropriate break-up of such
collateral into proprietary account of CM/ proprietary account of TM/ client account.
The CM shall ensure that the sum of break-up of such collateral provided by TM is
equal to the total value of such collateral provided by TM, and that the allocation of
such collateral to any entity as reported to the CC does not exceed the allocation
of collateral reported by the TM for that entity.

11. The amount of collateral allocated shall not exceed the amount of collateral
received by the TM/CM from the client and reported as such under the reporting
mechanism (refer Para 4), excluding the securities collateral re-pledged to CC
through margin pledge mechanism. Further, the sum of client collateral retained by
the TM/CM and client collateral passed on to CM/CC shall equal the amount of
collateral received by the TM/CM from the client. Also, the allocation of collateral at
CC shall not be lower than the amount of collateral (except securities collateral re-
pledged to CC) reported as having been passed on by the CM to the CC. The CC
shall have appropriate validations in place in respect of allocations and reporting
done by CMs. Further, CMs shall also perform validations at their end in respect of
allocations and reporting done by TMs.

12. An illustration is provided at Annexure-1 regarding permitted and non-permitted

allocation of collateral.

13. In case of BGs, the TM/CM may consider the unfunded portion of the BG as
proprietary collateral. An illustration is provided at Annexure-2.

14. The allocation thus provided by the CM to CC and by TM to CM shall be considered

as final by the CC and CM respectively for the purpose of granting exposure and
utilization during default.

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15. The TM/CM shall ensure that sufficient collateral is allocated to clients to cover their
margin requirements. However, if the client margin applicable at the CC for a client
in a segment exceeds the collateral allocated to the client plus the securities
collateral re-pledged to CC (from that client’s account) in the respective segment,
then the proprietary collateral of the TM/CM shall be blocked (including re-
pledged/pledged securities and allocated collateral). Such margin blocked from the
proprietary collateral towards a client’s margin shall be deemed to have been the
collateral allocated to that client. This provision shall include deemed allocation of
TM’s proprietary collateral towards client margins and deemed allocation of CM’s
proprietary collateral towards TM/CP/client margins.

16. The members shall ensure that allocated collateral plus value of securities collateral
re-pledged to the CC for a client is at all times greater than or equal to the minimum
margin collection requirement for the respective client in the respective segment,
since the amount of minimum margin collection requirement for a client may be
different from the margin applicable at CC. CCs shall put in place effective deterrent
mechanisms (penalty structure) in consultation with SEBI, which shall be applicable
in cases where the allocated collateral plus the securities collateral re-pledged to
CC in respect of a client, is falling short of minimum margin collection requirement
in the respective segment.

17. Information regarding the collateral allocated by the CM shall be made available on
a daily basis on the web portal facility to clients to view disaggregated collateral
reporting by TM/CM (refer Para 5). Further, CC shall also provide a facility to the
TMs of the clients to view such collateral allocation to the clients by the CM.

Collateral Valuation

18. CMs are required to maintain at least 50% of the total collateral in the form of cash
or cash equivalents. At individual client level, a client may have allocation of cash
equivalent, less than the value of non-cash collateral provided by the client. In other
words, the minimum 50% cash equivalent collateral requirement may not be applied
at the client level. For the purpose of monitoring of at least 50% cash-equivalent
collateral at the level of CM, the excess cash-equivalent collateral of a client shall
not be considered for other client or for proprietary account of TM/CM. However,
the excess cash-equivalent collateral of proprietary account of TM/CM can be
considered for clients trading/clearing through them, for the purpose of monitoring
minimum 50% cash-equivalent requirement.

19. An illustration of the above requirement is provided at Annexure-3.

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Blocking of Margins

20. The procedure for blocking of margins only specifies the order of blocking of
collateral available with the CC. There shall be no change in the requirement of
collection of upfront margins by the TM/CM. The TM/CM shall be required to ensure
that sufficient collateral is allocated to clients to cover their margin requirements
(refer Para 15 and 16).

21. The terms “Client Collateral”, “TM Collateral”, “CP Collateral” and “CM Collateral”
shall mean the total of the allocated collateral value plus the value of demat
securities collateral provided through margin pledge/re-pledge by any individual
client, TM, CP and CM respectively to the level of CC. The TM/CM collateral shall
mean the proprietary collateral of the TM/CM only and shall not include the
collateral of any of their clients.

22. On receipt of a trade from a client account by the CC, the margin shall first be
blocked from the value of the client collateral. If the client collateral is not sufficient,
the residual margin shall be blocked from the TM proprietary collateral of the TM of
such client. If the TM proprietary collateral is also not sufficient, then the residual
margin shall be blocked from the CM proprietary collateral of the CM of such TM.

23. In case of a trade from the proprietary account of a TM, the margin shall first be
blocked from the TM proprietary collateral, and in case such collateral is not
sufficient, then the residual margin shall be blocked from the CM proprietary
collateral.

24. Margins based on trades from proprietary account of the CM shall be blocked from
the proprietary collateral of the CM only.

25. An illustration of blocking of margins is provided at Annexure-4.

26. For monitoring of the risk reduction mode (90% utilization or such applicable limit),
the following procedure shall be adopted:

a. TM level risk reduction mode: Client margin in excess of 90% of the client
collateral shall be identified for each client under a TM. The total of such client
margin in excess of 90% of the client collateral, plus the proprietary TM margin
shall be assessed against the TM proprietary collateral for monitoring of TM
level risk reduction mode.

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 b. CM level risk reduction mode: Sum of client margin in excess of 90% of the
client collateral for each client under a TM plus the proprietary TM margin, in
excess of 90% of TM proprietary collateral shall be calculated as TM margin in
excess of 90% of TM collateral. Sum of such margin for each TM clearing
through a CM, plus sum of client margin in excess of 90% of the client collateral
for each client clearing through such CM, plus the proprietary CM margin shall
be assessed against the proprietary CM collateral for monitoring of CM level
risk reduction mode.

27. An illustration for monitoring of risk reduction mode is provided at Annexure-5.

28. In case of CP trades executed by TMs, the margin shall be blocked in the following
order- (i) CP collateral through the executing TM, if any, (ii) residual margin from
the proprietary collateral of the executing TM, and (iii) residual margin from the
proprietary collateral of the CM of the executing TM. Upon confirmation of such
trades by CM of the CP, the margin so blocked prior to the confirmation shall be
released, and shall be blocked in the following order- (i) CP collateral through the
confirming CM, and (ii) residual margin from the proprietary collateral of the
confirming CM. In case of CP trades, the requirement to ensure that sufficient
collateral is allocated to clients to cover their margin requirements shall be on the
confirming CM. However, if the trade is confirmed under the auto approval facility
provided by the CC, then margin shall be directly blocked in the following order- (i)
CP collateral through the confirming CM, and (ii) residual margin from the
proprietary collateral of the confirming CM.

Change of Allocation

29. CMs shall be permitted to change the allocation of collateral deposited with the CC,
subject to the value allocated to any client not exceeding the value of actual
collateral received from that client (excluding the securities collateral re-pledged to
CC through margin pledge mechanism). However, such change of allocation shall
be permitted subject to adequacy of available collateral with the CC after the
change vis-à-vis the margin obligation. An illustration is provided at Annexure-6.

30. CC shall also provide notification of such change of allocation of collateral to the
concerned client, in respect of whom the allocation has been changed, pursuant to
the change of allocation.

Client Margin Reporting

31. There shall be no change in the client margin reporting process.

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Settlement

32. There shall be no change in the settlement process.

Withdrawal of Collateral

33. Subject to the CM not being in default and fulfilling all obligations on a going concern
basis, the CM may place requests for withdrawal of collateral to the CC.

34. After validation of such requests, if the collateral is found to be releasable, the CC
shall release the collateral to the CM. CM may return the collateral to TM/CP/Clients
or utilize collateral of the entities who are in default.

35. CC shall also provide notification of such withdrawal of allocation of collateral to the
concerned clients, in respect of whom the allocation has been withdrawn, pursuant
to the withdrawal of allocation.

Default Management Process

36. The default management process by the CCs in case of default by a CM shall take
place in four stages:

a. Stage 1: Completion of settlement to non-defaulting CMs

b. Stage 2: Portability or immediate return of collateral
c. Stage 3: Close-out of positions and provisional appropriation of collateral
d. Stage 4: Identification of defaulting clients and final appropriation of collateral

Stage 1: Completion of settlement to non-defaulting CMs

37. CC shall utilize available financial resources to complete settlement in a timely

manner and complete the pay-outs to the non-defaulting members.

Stage 2: Portability or immediate return of collateral

38. CC shall put in place a mechanism/ process for TMs/clients/CPs of defaulting CM

to establish that they are not in default to the defaulting CM and have deposited
collateral to the extent of allocation (including deemed allocation). This process
shall be completed within a pre-specified time period. On identification of such non-

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 defaulting TMs/clients/CPs, CC shall provide them opportunity for either porting of
their positions and collateral to another CM or immediate return of their collateral.

39. Portability of Positions and Collateral:

a. Entities desirous of availing the facility of portability shall be required to have
established alternative trading/clearing arrangements with other TMs/CMs
other than the defaulting CM.

b. If any pay-out is due to such entities, such pay-out shall be made to the entities.
As a result, the amount of such pay-out shall be added to the pay-in shortfall of
the defaulting CM.

40. Immediate return of collateral:

a. Collateral of such entities shall only be utilized to the extent of losses due to
liquidation of their respective positions, and the remaining collateral shall be
returned, along with the pay-out due to such entities, if any. As a result, the
amount of such pay-out shall be added to the pay-in shortfall of the defaulting
CM.

41. In some circumstances, it may be desirable to liquidate the positions and even the
collateral, since both are subject to risks. Under such circumstances, not closing
out positions/collateral to allow for portability may lead to accumulation of losses.
Considering the nature of positions, market conditions and such other risk
assessment, the CC may at any stage decide to not provide the facility of portability.
If the CC decides to not provide the opportunity for portability, the CC shall
crystalize the profits/losses on close-out of positions and the value of collateral
arrived at after liquidation of the same.

Stage 3: Close-out of positions and provisional appropriation of collateral

42. For the remaining entities after Stage 2, i.e., entities other than the ones who could
avail the opportunity of either porting or immediate return of collateral in Stage 2,
following process shall be followed:

a. CC shall close out all open positions of the defaulting CM, including the
positions of TMs/clients/CPs clearing through such CM.

b. CC shall first utilize the CM/TM/Client/CP collateral for meeting any losses in
close-out of respective positions. It is clarified that TM/Client/CP collateral shall
include both allocated collateral (including deemed allocated collateral) and the

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 value of securities collateral provided through margin pledge/re-pledge to the
level of CC.

c. In case of any shortfall in collateral of any entity under the CM, any excess
proprietary collateral of the TM / CM of such entity shall be used. This shall
follow the same order of utilization as in case of blocking of margins. Any
shortage in the proprietary collateral of the TM / CM shall be met by applying
the default waterfall of the CC.

d. With regard to the defaulted settlement obligations, following process shall be

followed:

i. Any pay-out made to the non-defaulting clients in Stage 2 shall be

added to the defaulted obligations.

ii. The defaulted obligations (including pay-out in Para (i) above) shall be
first adjusted with the proprietary obligation of the defaulting CM to the
extent of funds/securities payable for the proprietary trades.
 Any shortage in the proprietary collateral of the defaulting CM
shall be met by applying the default waterfall of the CC.
 Any excess proprietary collateral of the CM shall also be used
for meeting the defaulted obligations.

iii. Remaining defaulted obligations shall be attributed pro-rata: funds pay-

in shortfall shall be attributed pro-rata among TM/clients/CP having
funds payable and securities pay-in shortfall shall be attributed pro-rata
among TM/clients/CP having deliverable positions in the security. Such
losses shall be recovered from the collateral of the TM/clients/CP
available, if any.
 Any shortage in the collateral of such TM/clients/CP shall be
met by applying the default waterfall of the CC.

iv. In case of any defaulted obligations attributed to a TM in Para (iii) above

(and in turn to its clients), the process enunciated above at Para (ii) and
(iii) above for a defaulting CM and its constituents shall apply, mutatis
mutandis, to the TM.

e. The aforesaid pro-rata attribution of shortages shall be provisional. The actual

attribution of shortages to clients shall be done in Stage-4.

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 f. In case there is any profit to a TM/client/CP during the close-out process, such
close-out profit shall be considered as pay-out due to the TM/client/CP.

43. An Illustration on the procedures to be followed in the Stage-2 and the Stage-3 are
given at Annexure-7.

Stage 4: Identification of defaulting clients and final appropriation of collateral

44. The procedure for verification and settlement of claims of constituents of defaulting
CM shall be as follows:

a. The process for identification of defaulting TM/CP/clients and the return of

collateral of non-defaulting TM/CP/clients shall be administered by the
appropriate committee viz., Member and Core Settlement Guarantee Fund
Committee (MCSGFC) of the Exchange or the CC.

b. The amount that can be claimed by the non-defaulting TM/CP/clients from the
CC shall be limited to the allocated collateral (including deemed allocated) and
the value of securities collateral provided through margin pledge/re-pledge to
the level of CC, plus the pay-out (including profit if any during close-out) due to
the constituent, less the losses in close-out of positions of the constituent.

c. The MCSGFC of the CC/Exchange shall implement the relevant procedures for
verification and settlement of claims of the non-defaulting TM/CP/clients of the
defaulting CM.

d. The constituents actually in default shall be identified and the pro-rata

attribution of shortages performed in Stage-3 shall be replaced by the actual
attribution of shortages. If there has been any excess collateral appropriated at
Stage-3 due to pro-rata attribution, such excess appropriation shall be
corrected, and the constituents shall be returned the collateral in full along with
the pay-out due to such entities. This amount shall be recovered from the
constituents who have higher shortage (pursuant to actual attribution) than the
one attributed on pro-rata basis. If such clients do not have sufficient collateral,
then the default waterfall of the CC (including its Core Settlement Guarantee
Fund (Core SGF), as per the specified order of waterfall) shall be applied.

e. For any collateral of a client retained by TM/CM, and not allocated to that
client’s account, the Exchange or the CC shall initiate suitable actions before
appropriate court of law for liquidating the assets (movable and immovable) of
the defaulter member as per the existing provisions. Further, eligible clients will

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 also have the access to compensation from the Investor Protection Fund, as
per the existing provisions.

45. Illustration on procedures to be followed in Stage-4 are provided at Annexure-8.

Default of TMs to CMs

46. The following procedure shall be adopted in case of default of TM to CM:

a. The CM shall continue to meet its obligations towards its other constituents, as
well as the CC.

b. The CM shall close-out all open positions of the defaulting TM (including clients
under the TM).

c. Under the supervision of the CC, the CM shall appropriate the collateral
towards losses. The losses in closing-out open positions and the settlement
obligations due from clients of the TM shall be appropriated first from the
allocated collateral (as per allocation provided by TM to CM, including deemed
allocated) and securities collateral provided through margin pledge/ re-
pledge to the level of CM/CC of respective clients. Any residual losses as well
as the losses in closing-out open positions and the settlement obligations of the
TM proprietary account shall be appropriated from the TM proprietary collateral.
In case of TM proprietary collateral being insufficient, the losses shall not be
appropriated from any other constituent of the CM or any constituent of the
defaulting TM.

d. After the above utilization towards losses in closing-out open positions of the
defaulting TM (and clients under the TM) and net settlement shortfall, all
remaining collateral/funds received from the defaulting TM (lying with CM/CC)
shall be provided by the CM to the Stock Exchanges.

e. Since the TM will be leading to default, the Stock Exchanges shall institute
relevant applicable procedures against the TM as per existing regulatory
provisions, byelaws, rules and regulations of the Stock Exchanges.

Violations

47. Any false allocation by members shall be treated as a violation and disciplinary
action shall be taken against the members.

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 48. The aforementioned framework for segregation and monitoring of collateral at client
level shall be applicable to all segments and product classes at Stock Exchanges/
Clearing Corporations.

49. The provisions of the circular no. SEBI/HO/MIRSD/DOP/CIR/P/2020/28 dated

February 25, 2020 shall, accordingly, be amended to the extent mentioned above.
All other provisions specified in the said circular dated February 25, 2020 shall
remain unchanged.

50. The provisions of Paragraphs 4 and 5 of this circular shall come into force
with effect from October 01, 2021, and other provisions of this circular shall come
into force with effect from December 01, 2021.

51. Stock Exchanges and Clearing Corporations are directed to:

a. take necessary steps to put in place systems for implementation of the

circular, including necessary amendments to the relevant bye-laws, rules
and regulations;

b. bring the provisions of this circular to the notice of their members and
also disseminate the same on their websites; and

c. communicate to SEBI, the status of implementation of the provisions of this

circular in the Monthly Development Report.

52. This circular is issued in exercise of the powers conferred under Section 11(1)
of the Securities and Exchange Board of India Act 1992, read with Section
10 of the Securities Contracts (Regulation) Act, 1956 to protect the interests
of investors in securities and to promote the development of, and to regulate
the securities market.

53. This circular is available on SEBI website at www.sebi.gov.in at “Legal

Framework→Circulars”.

Yours faithfully

(Sudeep Mishra)
General Manager
Market Regulation Department
email: [email protected]

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 Annexure-1: Allocation of collateral

Illustration 1:
Consider a self-clearing member (SCM) who has received the following cash collateral
from its clients:

Client Cash Received

(Rs)
Client-1 2 crore
Client-2 3 crore
Client-3 1 crore
Client-4 1 crore
Total 7 crore

The member places Rs 6 crore with the CC – Rs 4 crore out of client funds and Rs 2 crore
out of proprietary funds. Rs 3 crore worth of client collateral is maintained in the specified
client bank account of the member. Few illustrations of allocations and whether permitted
or not are provided below:

Sl. Allocation Comments

Prop 2 Cr
Client-1 1 Cr Permitted, since total Rs 4 cr is allocated among clients and
1 Client-2 1 Cr allocations to individual clients do not exceed the respective
Client-3 1 Cr collateral provided by them.
Client-4 1 Cr
Prop 2 Cr Permitted, since total Rs 4 cr is allocated among clients and
2 Client-1 2 Cr allocations to individual clients do not exceed the respective
Client-2 2 Cr collateral provided by them.
Prop 2 Cr
Permitted, since total Rs 4 cr is allocated among clients and
Client-2 3 Cr
3 allocations to individual clients do not exceed the respective
Client-3 0.5 Cr
collateral provided by them.
Client-4 0.5 Cr
Prop 3 Cr Not permitted, client collateral allocated as proprietary. Total
4 Client-1 2 Cr collateral received from clients does not equal amount with the
Client-3 1 Cr member plus amount allocated.
Prop 2 Cr
Not permitted, allocation to Client-3 is in excess from the collateral
5 Client-2 2 Cr
received from the client.
Client-3 2 Cr
Client-1 2 Cr
Permitted, proprietary collateral can be allocated as client collateral
Client-2 3 Cr
6 provided the allocated amount does not exceed the actual collateral
Client-3 0.5 Cr
received from the client.
Client-4 0.5 Cr

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 Client-1 4 Cr Not permitted, although proprietary collateral can be allocated as
7 Client-3 1 Cr client collateral, such collateral cannot exceed the actual collateral
Client-4 1 Cr received from the client

Illustration 2:
Suppose a SCM receives the following collateral from clients:

Client Collateral Type Value (Rs)

Client-1 Cash 1 crore
Client-2 Approved securities 2 crore
Client-2 Non-approved securities 2 crore

The member re-pledges the approved securities to the CC. The non-approved securities
cannot be provided to the CC. The member provides Rs 1 crore cash collateral of Client-
1 and Rs 5 crore proprietary cash collateral to the CC. The member may allocate the
collateral as follows:

Client Value (Rs)

Client-1 1 crore
Proprietary 5 crore

Thus, only the collateral provided to the CC (excluding securities provided through the
margin pledge mechanism) shall be allocated. To clarify, Client-2 would still get the
benefit of eligible securities collateral re-pledged to CC, however the value for the same
shall be assigned by the CC to the account of Client-2, and therefore no collateral
allocation shall be done by the member. The non-approved securities collateral would be
retained by the member.

If the Client-2 wishes to trade in such a manner that the margin would exceed Rs 2 crore,
the member may allocate the proprietary collateral to the client, as follows:

Client Value (Rs)

Client-1 1 crore
Client-2 2 crore
Proprietary 3 crore

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 Annexure-2: Treatment of unfunded portion of BG

Consider an example of a SCM with two clients. Suppose the SCM receives the following
cash collateral from each of the clients:

Client Cash Received

(Rs)
Client-1 1 crore
Client-2 1 crore

Suppose the SCM provides the cash received to a bank and obtains a Bank Guarantee
of Rs. 4 crore and provides it to CC. Then, the CM shall allocate the BG as follows:

Entity BG Allocation
(Rs)
Client-1 1 crore
Client-2 1 crore
SCM – Proprietary 2 crore

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 Annexure-3: Monitoring of the minimum 50% cash-equivalent collateral
requirement
Consider the following example of collateral provided by various entities under a CM.

Cash-equivalent Non-cash Excess cash-eq. Excess noncash

Entity
(A) (B) If(A>B,A-B,0) If(B>A,B-A,0)
CM Prop 100 40 60 0
TM-1 Prop 0 0 0 0
TM-1 Cli-1 200 250 0 50
TM-1 Cli-2 70 10 60 0
TM-1 Cli-3 70 100 0 30
TM-2 Prop 300 200 100 0
TM-2 Cli-4 70 90 0 20
TM-2 Cli-5 50 100 0 50

Considering TM-1, the excess cash-equivalent collateral of TM-1 Cli-2 cannot be used to
offset the excess non-cash collateral of TM-1 Cli-1 and TM-1 Cli-3. Therefore, there will
be excess non-cash collateral to the extent of 80 (50 for Cli-1 and 30 for Cli-3) under TM-
1.

Considering TM-2, the excess proprietary cash-equivalent collateral of TM-2 can be used
to offset the excess non-cash collateral of TM-2 Cli-4 and TM-2 Cli-5. Therefore, there
will be no excess noncash collateral under TM-2.

Summary of excess cash-equivalent and excess non-cash collateral under CM prop, TM-
1 and TM-2 would be as under:

Entity Excess Cash-eq Excess noncash

CM Prop 60 -
TM-1 - 80
TM-2 30 -

The excess cash-equivalent collateral of TM-2 cannot be used to offset the excess non-
cash collateral of TM-1. However, the excess cash-equivalent collateral of CM Prop can
be used to offset excess non-cash collateral of TM-1. Therefore, the overall excess non-
cash collateral will be 20, for TM-1.

Entity Excess noncash

TM-1 20

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The benefit of this excess non-cash collateral (20) will not be available under TM-1. The
entities who will get benefit would be identified through a suitable mechanism by the CCs.
In this example, suppose the CC applies FIFO rule and it is assumed that Cli-1 has
pledged the non-cash collateral before Cli-3. Therefore, the Cli-1 will receive benefit for
its entire collateral (so the effective value of collateral of Cli-1 will be 200+250=450). On
the other hand, Cli-3 will not receive benefit of non-cash collateral to the extent of 20 (so
the effective value of collateral of Cli-3 will be 70+80 = 150).

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 Annexure-4: Blocking of margins

Suppose the total collateral (allocated collateral plus securities collateral placed through
margin pledge/ re-pledge to CC) available against various entities are as given below.

Entity Collateral (Rs)

CMTM Prop 1000
TM-1 Prop 500
TM-1 Cli-1 300
TM-1 Cli-2 300

 Trade-1: TM-1 Cli-2 trades with margin requirement of Rs 100. Blocking of margin
shall be as follows:

Collateral (Rs) Blocking

Entity
(Rs)
CMTM Prop 1000 0
TM-1 Prop 500 0
TM-1 Cli-1 300 0
TM-1 Cli-2 300 100

 Trade-2: TM-1 Cli-1 trades with margin requirement of Rs 600. Blocking of margin
shall be as follows:

Entity Collateral (Rs) Blocking (Rs)

CMTM Prop 1000 0
TM-1 Prop 500 300
TM-1 Cli-1 300 300
TM-1 Cli-2 300 100

 Trade-3: TM-1 Cli-2 trades with revised margin requirement for Cli-2 of Rs 600.
Blocking of margin shall be as follows:

Collateral (Rs) Blocking

Entity
(Rs)
CMTM Prop 1000 100
TM-1 Prop 500 500
TM-1 Cli-1 300 300
TM-1 Cli-2 300 300

Page 18 of 26
 Trade-4: TM-1 Cli-2 trades with revised margin requirement for Cli-2 of Rs 900.
Blocking of margin shall be as follows:

Collateral Blocking (Rs)

Entity
(Rs)
CMTM Prop 1000 400
TM-1 Prop 500 500
TM-1 Cli-1 300 300
TM-1 Cli-2 300 300

In the above examples, the collateral of Rs 500 blocked from the TM1-Prop, and the
collateral of Rs 400 blocked from CMTM Prop, shall be deemed to be allocated to TM-1
Cli-1 and TM-1 Cli-2. The deemed allocation would be as follows:

Margin Blocked from Deemed Deemed allocation from

Client (Rs) client collateral allocation from CMTM Prop to TM-1 Prop
(Rs) TM-1 Prop (Rs) (Rs)
TM-1 Cli-1 600 300 300
400
TM-1 Cli-2 900 300 600

To clarify, the deemed allocation from CMTM Prop to TM-1 Prop is Rs 400, therefore the
total TM-1 Prop collateral (including deemed allocated) would be Rs 900 (Rs 500 + Rs
400). Out of this, the excess client margin would be considered to be deemed allocated
to the respective client.

Page 19 of 26
 Annexure-5: Monitoring of risk reduction mode

Suppose the total collateral (allocated collateral plus securities collateral placed through
margin pledge/ re-pledge to CC) available against various entities, along with their margin
obligations, are as given below.

Collateral Margin CliMrgn>90%

CM TM Client (Rs) (Rs) (Rs)
CM-1 - Prop 1200 800 -
CM-1 TM-1 Prop 500 400 -
CM-1 TM-1 Client-1 800 780 60
CM-1 TM-1 Client-2 500 450 0
CM-1 TM-1 Client-3 400 380 20
CM-1 TM-2 Prop 500 200 -
CM-1 TM-2 Client-4 1000 920 20
CM-1 TM-2 Client-5 1000 880 0

TM level monitoring
In the above table, “CliMrgn>90%”, or client margin in excess of 90%, has been calculated
as margin for the client less 90% of the client collateral. Risk reduction mode monitoring
for TM shall be based on assessment of [TM Prop Margin + CliMrgn>90%] against the
[TM Prop collateral]. Accordingly, margin utilization percentage of TM1 and TM2 would
be as under:

 Margin utilization percentage of TM1 = [400 + (60 + 0 + 20)] /500 = 96%

 Margin utilization percentage of TM2 = [200 + (20 + 0)] /500 = 44%

In other words, for TM1, margin of Rs 30 is in excess of 90% of its prop collateral, while
there is no excess margin for TM2 against its prop collateral. The same has been
tabulated below:

Total 90% of TM
CliMrgn>90% Prop Margin prop collateral TMMrgn>90%
TM (Rs) (Rs) (Rs) (Rs)
TM-1 80 400 450 30
TM-2 20 200 450 0

CM level monitoring
In the above table, “TMMrgn>90%”, or TM Margin in excess of 90%, has been calculated
as [CliMrgn>90% + TM Prop margin] in excess of 90% of TM prop collateral. Risk

Page 20 of 26
reduction mode monitoring for CM shall be based on assessment of [CM Prop Margin +
TMMrgn>90%] against the [CM Prop Collateral]. Accordingly, margin utilization
percentage of CM1 would be as under:

 Margin utilization percentage of CM1 = [800 + (30 + 0)]/1200 = 69.1%

Page 21 of 26
 Annexure-6: Change of allocation

Suppose a SCM has following collateral:

Entity Cash (Rs)
SCM Prop 200
Cli-1 200
Cli-2 200

Out of the total available cash of Rs 600, suppose the SCM has provided an FDR of Rs
400 to the CC (with Rs 200 cash remaining with the member). Suppose, the FDR provided
to the CC is allocated by the SCM as follows. Here, the SCM has chosen not to allocate
any collateral to Cli-2 in the total collateral placed with the CC:
Entity Collateral allocated (Rs)
SCM Prop 200
Cli-1 200

Suppose the margin requirement is as follows:

Entity Collateral (Rs) Margin blocked (Rs)
CM Prop 200 160
Cli-1 200 150

Change in allocation: Example 1

The member shall be permitted to change the allocation as follows (i.e. the member
chooses to consider the cash retained with it to be as Rs 50 belonging to Cli-1 and Rs
150 belonging to Cli-2):
Entity Collateral (Rs)
CM Prop 200
Cli-1 150
Cli-2 50

Change in allocation: Example 2

The member shall not be permitted to change the allocation as follows (i.e. the member
chooses to consider the cash retained with it to be as Rs 100 belonging to each client):
Entity Collateral (Rs)
CM Prop 200
Cli-1 100
Cli-2 100

This allocation shall not be permitted since Cli-1 has a margin requirement of Rs 150.

Page 22 of 26
 Annexure-7: Procedures to be followed in Stage-2 and Stage-3

Consider an example of a SCM defaulting in the derivatives segment. An illustration of

the cash settlement obligations of prop/clients and attribution of shortage is provided
below (the available collateral shown against different entities comprises of both allocated
collateral (including deemed allocated) and value of demat securities collateral provided
through margin pledge/re-pledge to the level of CC):

Entity (Pay-in)/ Collateral Position closeout Remaining

Pay-out (Rs) (Rs) loss (Rs) Collateral (Rs)
Prop (3 crore) 10 crore 4 crore 6 crore
Client-1 (3 crore) 10 crore 3 crore 7 crore
Client-2 (3 crore) 15 crore 4 crore 11 crore
Client-3 2 crore 15 crore 2 crore 13 crore
Client-4 2 crore 3 crore 1 crore 2 crore
Net Pay-in 5 crore
Shortfall 5 crore

Scenario 1: All pay-out clients establish not being in default

1. Suppose Client-3 and Client-4 establish within the pre-specified time period that
they are not in default, do not have debit balance/dues towards the member and
have not received the pay-out due.
2. The remaining collateral of Client-3 and Client-4 (Rs 13 crore and Rs 2 crore
respectively), along with the pay-out for the clients (Rs 2 crore each), shall be
provided to the clients.
3. The settlement shortfall would now be Rs 9 crore (Rs 5 crore shortfall in net pay-
in, plus Rs 4 crore of pay-out made to Client-3 and Client-4).
4. The settlement shortfall of Rs 9 crore shall be first adjusted with the SCM
proprietary pay-in obligation of Rs 3 crore. Excess remaining proprietary collateral
of SCM (Rs 3 crore) shall also be used towards the settlement shortfall.
5. Remaining settlement shortfall of Rs 3 crore shall be attributed pro-rata to clients
having pay-in, i.e., settlement shortfall of Rs 1.5 crore each shall be attributed to
Client-1 and Client-2 and appropriated from their collateral.

Scenario 2: One pay-out client establishes not being in default

1. Suppose Client-3 establishes within the pre-specified time period of not being in
default, not having debit balance/dues towards the member and not having
received the pay-out due.

Page 23 of 26
 2. The remaining collateral of Client-3 (Rs 13 crore), along with the pay-out (Rs 2
crore), shall be provided to the Client-3.
3. The settlement shortfall would now be Rs 7 crore (Rs 5 crore shortfall in net pay-
in, plus Rs 2 crore of pay-out made to Client-3).
4. The settlement shortfall of Rs 7 crore shall be first adjusted with the SCM
proprietary pay-in obligation of Rs 3 crore. Excess remaining proprietary collateral
of SCM (Rs 3 crore) shall also be used towards the settlement shortfall.
5. Remaining settlement shortfall of Rs 1 crore shall be attributed pro-rata to clients
having pay-in, i.e., settlement shortfall of Rs 0.5 crore each shall be attributed to
Client-1 and Client-2 and appropriated from their collateral.

Scenario 3: One pay-out client and one pay-in client establish not being in default

1. Suppose Client-1 and Client-3 establish within the pre-specified time period of not
being in default, not having debit balance/dues towards the member and not
having received the pay-out due, where applicable.
2. The remaining collateral of Client-1 and Client-3 (Rs 7 crore and Rs 13 crore
respectively) shall be provided to them. The pay-out due to Client-3 (Rs 2 crore)
shall also be provided to Client-3.
3. The settlement shortfall would now be Rs 7 crore (Rs 5 crore shortfall in net pay-
in, plus Rs 2 crore of pay-out made to Client-3).
4. The settlement shortfall of Rs 7 crore shall be first adjusted with the SCM
proprietary pay-in obligation of Rs 3 crore. Excess remaining proprietary collateral
of SCM (Rs 3 crore) shall also be used towards the settlement shortfall.
5. Remaining settlement shortfall of Rs 1 crore shall be attributed to Client-2 (since it
is established that Client-1 is not in default, no shortage shall be attributed to
Client-1).

Page 24 of 26
 Annexure-8: Procedures to be followed in Stage-4

Illustration 1:
Suppose an SCM had no proprietary positions, and the net pay-in obligations were based
on five clients. There was a pay-in shortfall of Rs 300, against the net pay-in of Rs 600.
Suppose none of the clients could establish within the pre-specified time period of not
being in default, not having debit balance/dues towards the member and not having
received the pay-out due. Assume there is no position close-out loss. The pay-in shortfall
of Rs 300 would be attributed during the Stage 3 on a pro-rata basis from the clients
having pay-in obligations. This would be utilized from their available collateral (the
available collateral shown against different entities comprises of both allocated collateral
(including deemed allocated) and value of securities collateral provided through margin
pledge/re-pledge to the level of CC).

Entity (PI) / PO Collateral Utilized Remaining

(Rs) (Rs) Collateral (Rs) Collateral (Rs)
Client-1 150 200 0 200
Client-2 150 100 0 100
Client-3 -300 300 100 200
Client-4 -300 300 100 200
Client-5 -300 300 100 200

Suppose the actual client defaults and position of payables/receivables are identified as
follows:

Entity Findings Claim

Pay-out of 150
Client-1 Did not receive 150 payout
Return of collateral of 200
Pay-out of 150
Client-2 Did not receive 150 payout
Return of collateral of 100
Client-3 Did not make any pay-in -
Client-4 Did not make any pay-in -
Client-5 Had made a pay-in of 300 Return of collateral of 300

Accordingly, the remaining collateral of defaulting clients shall be utilized to fulfil the
claims of non-defaulting clients. The additional realization and claim settlement is
tabulated below:

Entity Additional utilization of Claim Settled

collateral
Client-1 - Pay-out of 150
Return of collateral of 200

Page 25 of 26
 Client-2 - Pay-out of 150
Return of collateral of 100
Client-3 Additional collateral of 200 -
utilized
Client-4 Additional collateral of 200 -
utilized
Client-5 - Return of collateral of 100 (from realized)
Return of collateral of 200 (from remaining)

In the event of the remaining collateral of Client-3 and Client-4 not being sufficient (say,
due to excess losses in liquidation of positions), the default waterfall of the CC shall be
applied for such losses.

Illustration 2:
The following illustration demonstrates the limit on maximum admissible claim against the
collateral at the CC by the TM/clients/CP of the defaulting CM. The CC shall recognize
the claim of the clients up to the collateral allocated by the CM, plus the value of securities
re-pledged till the level of the CC, plus the collateral deemed to be allocated based on
the margin requirement of the client. Some examples are tabulated below:

Entity Collateral Margin Collateral Value of Collateral Maximum

provided allocated Securities deemed Admissible
to by member Re-pledged allocated claim against
member at CC to CC (due to collateral at CC
margins)
Client-1 1000 800 700 300 0 1000
Client-2 1000 0 400 600 0 1000
Client-3 1000 0 400 400 0 800
Client-4 1000 800 0 0 800 800
Client-5 1000 0 0 0 0 0
Client-6 0 200 100 0 100 0

In the last example (Client-6), the CM shall not be permitted to allocate collateral or permit
client to trade beyond the available collateral. In case of such violations, the claim shall
not be admissible, and the collateral (allocated and/or deemed so) shall be treated as
proprietary collateral of the CM.

***********

Page 26 of 26
 DEPARTMENT: COMPLIANCE
Download Ref No: NCL/CMPL/49348 Date: August 20, 2021
Circular Ref. No: 25/2021

All Members

Sub: Segregation and Monitoring of Collateral at Client Level - Reporting Format

This is with reference to SEBI circular dated July 20, 2021 on the captioned subject matter. As per Para
4 of the SEBI circular, with a view to provide visibility of client-wise collateral (for each client) at all
levels, viz., TM, CM and Clearing Corporation (CC), a reporting mechanism, covering both cash and
non-cash collaterals shall be specified by the Clearing Corporations.

NCL in consultation with other Clearing Corporations has come out with a format for reporting
disaggregated collateral information (segment-wise and asset type wise) at the client level.

The reporting format is given in Annexure 1.

Clearing Members are hereby informed that data as sought in Annexure 1 is required to be uploaded to
NCL on a daily basis. Further, it is clarified that clearing members who are registered with multiple
clearing corporations i.e. registered with more than one equity or commodity clearing corporation are
required to report the collaterals which is available with respective clearing corporation only instead of
aggregated collateral across all clearing corporations. Collaterals lying with other clearing corporations
should be reported to the respective clearing corporations with whom the same is available e.g. a
clearing member is clearing through NCL in one segment and ICCL in another segment, such clearing
member is required to upload collateral available with NCL to NCL only and collateral available with
ICCL to ICCL only instead of reporting aggregated value of collateral across NCL & ICCL to both
NCL and ICCL.

Members are advised to take note of the same and put in place systems and procedures so as to ensure
adherence to the compliance requirements.

Members are requested to note that the provisions of this circular are applicable effective October 01,
2021.

For and on behalf of

NSE Clearing Limited

Compliance Department

Telephone No Fax No Email id

1800 266 0050 022-26598243 [email protected]
 DEPARTMENT: COMPLIANCE
Download Ref No: NCL/CMPL/49640 Date: September 17, 2021
Circular Ref. No: 27/2021

All Members

Sub: Segregation and Monitoring of Collateral at Client Level - Reporting Format

Further to our circular NCL/CMPL/49348 dated August 20, 2021 on the above captioned
subject, based on the feedback received from the members, NCL in consultation with other
Clearing Corporations has made minor modification to the format for reporting of
disaggregated collateral information. The details of the change is given below:

Sr. No Field as per old format Field as per revised format

9 Value of MTM UCC Code

The revised reporting format along with the change highlighted is given in Annexure 1.

Clearing Members are hereby informed that data reporting is applicable for Monday to
Saturday on a daily basis. The report for Friday and Saturday shall be uploaded on the next
trading day before the cut-off time.

Based on queries received from members, frequently asked questions (FAQs) are being issued
as Annexure-2.

Members are advised to take note of the same.

Members are requested to note that the provisions of this circular are applicable effective
October 01, 2021.

For and on behalf of

NSE Clearing Limited

Compliance Department

Telephone No Fax No Email id

1800 266 0050 022-26598243 [email protected]
 DEPARTMENT: COMPLIANCE
Download Ref No: NCL/CMPL/49764 Date: September 29, 2021
Circular Ref. No: 28/2021

All Members

Sub: Segregation and Monitoring of Collateral at Client Level - Reporting Format

This is further to our circulars NCL/CMPL/49348 dated August 20, 2021 and
NCL/CMPL/49640 dated September 17, 2021 on the captioned subject.

In this regard User Manual for uploading Segregated Client Collateral Report is enclosed as
Annexure 1 and Procedure to view Collateral data by clients on the website is enclosed as
Annexure 2.

Members who are exempted from reporting shall provide declaration on daily basis. (refer Part
B of Annexure 1)

Members are requested to note that the provisions of this circular are effective October 01,
2021 i.e. reporting for October 01, 2021 shall be done before 1 PM on October 04, 2021.

Members may please note that reporting shall be applicable for all working days i.e. Monday
to Saturday except public holidays.

For and on behalf of

NSE Clearing Limited

Compliance Department

Telephone No Fax No Email id

1800 266 0050 022-26598243 [email protected]
 NOTICES

Notice No. 20210823-44 Notice Date 23 Aug 2021

Category Settlement/RMS Segment General

Subject Segregation and Monitoring of Collateral at Client Level - Reporting Format

Attachments Annexure 1.pdf

Content

To
All Members/Participants,

This circular is issued in reference to SEBI circular SEBI/HO/MRD2_DCAP/CIR/2021/0598 dated July 20, 2021. As per Para 4 of the SEBI circular states,
with a view to provide visibility of client-wise collateral (for each client) at all levels, viz., TM, CM and Clearing Corporation (CC), a reporting mechanism,
covering both cash and non-cash collaterals shall be specified by the Clearing Corporations.
Now, ICCL in consultation with other Clearing Corporations has come out with a format for reporting disaggregated collateral information (segment-wise
and asset type wise) at the client level. The reporting format is given in Annexure 1.
Clearing Members are hereby informed that data as sought in Annexure 1 is required to be uploaded to ICCL on a daily basis. Further, it is clarified that
clearing members who are registered with multiple clearing corporations i.e. registered with more than one equity or commodity clearing corporation are
required to report the collaterals which is available with respective clearing corporation only instead of aggregated collateral across all clearing
corporations. Collaterals lying with other clearing corporations should be reported to the respective clearing corporations with whom the same is available
e.g. a clearing member is clearing through ICCL in one segment and NCL in another segment, such clearing member is required to upload collateral
available with ICCL to ICCL only and collateral available with NCL to NCL only instead of reporting aggregated value of collateral across ICCL & NCL to
both ICCL and NCL.
The provisions of this circular are applicable effective October 01, 2021.
Members are advised to take note of the same and put in place systems and procedures so as to ensure adherence to the compliance requirements.
For any clarifications, Members may contact their respective Relationship Managers or Membership & Inspection at +91-22-22725744/8365/8788.
For and on behalf of the Indian Clearing Corporation Ltd.
Roanna Lewis
Sr. Manager
Membership & Inspection
 Annexure 1

Nomenclature (File Name) CM PAN_DDMMYYYY_Batch No.

Explanation:
“PAN” shall be the Clearing Member’s PAN (Alpha Numeric 10
characters)
Date shall be the trade date for which reporting is done.
Batch No. starts from 01, in case of multiple files of same day.
It shall be a csv file and zip format.
Frequency of Reporting Daily basis
Cut-off time for submission Cut-off time will be 1 PM on T+1 day

File structure
Sr. No Field Name Length (Max) Description
1 Date DD-MM-YYYY Date shall be the trade date for which reporting is
done. It should match with the date mentioned in
file nomenclature.
2 Clearing Member PAN Char (10) Alpha-numeric clearing member PAN.

Self-Clearing Member should insert PAN number in

both CM PAN & TM PAN column
3 Trading member PAN Char (10) Alpha-numeric trading member PAN

Value can be Blank when CP code is there

Self-Clearing Member should insert PAN number in

both CM PAN & TM PAN column
4 CP Code Char (12) Alpha-numeric CP code

Value can be Blank only when Client PAN is there

or Account type is 'P'
5 CP PAN Char (10) Alpha-numeric CP PAN

Value can be Blank only when Client PAN is there

or Account type is 'P'
6 Client PAN Char (10) Alpha-numeric CP PAN

Value can be Blank only when CP Code is there or

Account type is 'P'
7 Account Type Char (1) ‘P’ for Pro and ‘C’ for Client/CP
8 Segment Indicator Char (03) Values shall be the following:

Values shall be CO for Commodity Derivatives

Segment
9 Value of MTM Number (20) Value in Rs.
Sr. No Field Name Length (Max) Description
Decimals shall be allowed upto 3 digits.

Negative Values allowed

10 Financial Ledger Number (20) Value in Rs.
balance-A in the books
of TM for clients and in Decimals shall be allowed upto 3 digits.
the books of CM for
TM ( Pro) and in the Value shall be for the segment. It shall include the
books of CM for CP Credit entry on account of EPI and MTM values.

Negative Balance allowed.

11 Financial Ledger Number (20) Value in Rs.
balance (clear)-B in
the books of TM for Decimals shall be allowed upto 3 digits
clients and in the
books of CM for TM Value shall be for the segment. Financial ledger
(Pro) and in the books balance, after adjusting for open bills of the client,
of CM for CP un-cleared cheques deposited or issued and the
margin obligations. Open bills also contain ‘value of
credit entry posted in client ledger in lieu
of successful EPI to CC.

Negative Balance allowed

12 Peak Financial Ledger Number (20) Value in Rs
Balance (Clear)-C in
the books of TM for Decimals shall be allowed upto 3 digits
clients and in the
books of CM for TM Value shall be for the segment.
(Pro) and in the books
of CM for CP Highest net credit balance for the segment during
the day. However, in case there is clear
debit balance for the segment, then report lowest net
debit balance. Financial ledger balance, after
adjusting for open bills of the client, un-cleared
cheques deposited or issued and the margin
obligations. Open bills also contain ‘value of credit
entry posted in client ledger in lieu
of successful EPI to CC.

Negative Balance allowed

13 Bank Guarantee (BG) Number (20) Value in Rs.
received by TM from
clients and by CM from Decimals shall be allowed upto 3 digits
TM (Pro) and from
CPs
14 Fixed Deposit Receipt Number (20) Value in Rs.
(FDR) received by TM
from clients and by CM Decimals shall be allowed upto 3 digits
from TM(Pro) and from
CPs
Sr. No Field Name Length (Max) Description
15 Approved Securities Number (20) Value in Rs.
Cash Component
received by TM from Decimals shall be allowed upto 3 digits
clients and by CM from
TM(Pro) and from CPs Value after appropriate haircut
16 Approved Securities Number (20) Value in Rs.
Non-cash component
received by TM from Decimals shall be allowed upto 3 digits
clients and by CM from
TM(Pro) and from CPs Value after appropriate haircut
17 Non-Approved Number (20) Value in Rs.
Securities received by
TM from clients and by Decimals shall be allowed upto 3 digits
CM from TM(Pro) and
from CPs Value after appropriate haircut
18 Value of CC approved Number (20) Value in Rs.
Commodities received
by TM from clients and Decimals shall be allowed upto 3 digits
by CM from TM(Pro)
and from CPs Value after appropriate haircut
19 Other collaterals Number (20) Value in Rs.
received by TM from
clients and by CM from Decimals shall be allowed up to 3 digits.
TM(Pro) and from CPs
Other collateral would be any other form not
covered in Column 10 to Column 18
20 Credit entry in ledger Number (20) Value in Rs.
in lieu of EPI for clients
/ TM Pro Decimals shall be allowed upto 3 digits.

Value of credit entry posted in ledger in lieu of

successful EPI to CC, which is considered for margin
purpose for the day.
21 Pool Account for Number (20) Value in Rs.
clients / TM Pro
Decimals shall be allowed upto 3 digits.

Value of the securities, which are sold and available

in the Pool account of the member and considered
for margin purpose for the day.
22 Cash Retained by TM Number (20) Value in Rs.

Decimals shall be allowed upto 3 digits. The details

will pertain to collateral retained by the TM from
client
23 Bank Guarantee (BG) Number (20) Value in Rs.
Retained by TM
Decimals shall be allowed upto 3 digits. The details
will pertain to collateral received from client and
retained with the TM
Sr. No Field Name Length (Max) Description
24 Fixed Deposit Receipt Number (20) Value in Rs.
(FDR) Retained by TM
Decimals shall be allowed upto 3 digits.

The details will pertain to collateral received from

client and retained with the TM. It should not contain
details of FDR passed on to the CM in any other form
of collateral.
25 Approved Securities Number (20) Value in Rs.
Cash Component
Retained by TM Decimals shall be allowed upto 3 digits

Value after appropriate haircut

26 Approved Securities Number (20) Value in Rs.
Non-cash component
Retained by TM Decimals shall be allowed upto 3 digits

Value after appropriate haircut

27 Non-Approved Value in Rs.
Securities Retained by
TM Decimals shall be allowed upto 3 digits

Value after appropriate haircut

28 Value of CC approved Number (20) Value in Rs.
Commodities
Retained by TM Decimals shall be allowed upto 3 digits

Value after appropriate haircut

29 Other Collaterals Number (20) Value in Rs.
Retained by TM
Decimals shall be allowed upto 3 digits.
30 Cash placed with CM Number (20) Value in Rs.

Decimals shall be allowed upto 3 digits.

The details will pertain to Collaterals placed with CM

for Client/TM Pro/CP.

31 Bank Guarantee (BG) Number (20) Value in Rs.

placed with CM
Decimals shall be allowed upto 3 digits.

The details will pertain to Collaterals placed with CM

for Client/TM Pro/CP.

The details shall include BG created out of client

funds.

For account type ‘C’ the details shall include funded

portion of BG and for account type ‘P’ the details
shall include non-funded portion of BG.
Sr. No Field Name Length (Max) Description

For TM Pro if BG is created from own funds and

placed with Clearing Member the same shall also be
included for account type ‘P’.
32 Fixed deposit receipt Number (20) Value in Rs.
(FDR) placed with CM
Decimals shall be allowed upto 3 digits.

The details will pertain to Collaterals placed with

CM for Client/TM Pro/CP.

The details shall include FD created out of client

funds.
33 Approved Securities Number (20) Value in Rs.
Cash Component
placed with CM Decimals shall be allowed upto 3 digits.

The details will pertain to Collaterals placed with

CM for Client/TM Pro/CP.

Value after appropriate haircut

34 Approved Securities Number (20) Value in Rs.
Non-cash component
placed with CM Decimals shall be allowed upto 3 digits.

The details will pertain to Collaterals placed with

CM for Client/TM Pro/CP.

Value after appropriate haircut

35 Non-Approved Number (20) Value in Rs.
Securities placed with
CM Decimals shall be allowed upto 3 digits.

The details will pertain to Collaterals placed with

CM for Client/TM Pro/CP.

Value after appropriate haircut

36 Value of CC approved Number (20) Value in Rs.
Commodities placed
with CM Decimals shall be allowed upto 3 digits.

The details will pertain to Collaterals placed with

CM for Client/TM Pro/CP.

Value after appropriate haircut

37 Other Collaterals Number (20) Value in Rs.
placed with CM
Decimals shall be allowed upto 3 digits.
Sr. No Field Name Length (Max) Description
38 Cash Retained with Number (20) Value in Rs.
CM
Decimals shall be allowed upto 3 digits.

The details will pertain to collateral received from

TM/CP and retained by the CM
39 Bank Guarantee (BG) Number (20) Value in Rs.
retained with CM
Decimals shall be allowed upto 3 digits.

The details will pertain to collateral received from

TM/CP and retained by the CM.
40 Fixed deposit receipt Number (20) Value in Rs.
(FDR) retained with
CM Decimals shall be allowed upto 3 digits.

The details will pertain to collateral received from

TM/CP and retained by the CM.

It should not contain details of FDR passed on to the

CC in any other form of collateral.
41 Approved Securities Number (20) Value in Rs.
Cash Component
retained with CM Decimals shall be allowed upto 3 digits.

The details will pertain to collateral received from

TM/CP and retained by the CM.
Value after appropriate haircut
42 Approved Securities Number (20) Value in Rs.
Non-cash component
retained with CM Decimals shall be allowed upto 3 digits.

The details will pertain to collateral received from

TM/CP and retained by the CM.

Value after appropriate haircut

43 Non-Approved Number (20) Value in Rs.
Securities retained
with CM Decimals shall be allowed upto 3 digits.

The details will pertain to collateral received from

TM/CP and retained by the CM.

Value after appropriate haircut

44 Value of CC approved Number (20) Value in Rs.
Commodities retained
with CM Decimals shall be allowed upto 3 digits.

The details will pertain to collateral received from

TM/CP and retained by the CM.
Sr. No Field Name Length (Max) Description
Value after appropriate haircut
45 Other Collaterals Number (20) Value in Rs.
Retained with CM
Decimals shall be allowed upto 3 digits.

The details will pertain to collateral received from

TM/CP and retained by the CM.

Value after appropriate haircut

46 Cash placed with Number (20) Value in Rs.

MCXCCL
Decimals shall be allowed upto 3 digits.

The details will pertain to collateral placed with CC

for the Client/TM Pro/CP/CM.
47 Bank Guarantee (BG) Number (20) Value in Rs.
placed with MCXCCL
Decimals shall be allowed upto 3 digits.

The details will pertain to collateral placed with CC

for the Client/TM Pro/CP/CM.
48 Fixed deposit receipt Number (20) Value in Rs.
(FDR) placed with
MCXCCL Decimals shall be allowed upto 3 digits.

The details will pertain to collateral placed with CC

for the Client/TM Pro/CP/CM.
49 Approved Securities Number (20) Value in Rs.
Cash Component
placed with MCXCCL Decimals shall be allowed upto 3 digits.
saa
The details will pertain to collateral placed with CC
for the Client/TM Pro/CP/CM

Value after appropriate haircut

50 Approved Securities Number (20) Value in Rs.
Non-cash component
placed with MCXCCL Decimals shall be allowed upto 3 digits.

The details will pertain to collateral placed with CC

for the Client/TM Pro/CP/CM

Value after appropriate haircut

Sr. No Field Name Length (Max) Description
51 Value of CC approved Number (20) Value in Rs.
Commodities placed
with MCXCCL Decimals shall be allowed upto 3 digits.

The details will pertain to collateral placed with CC

for the Client/TM Pro/CP/CM.

Value after appropriate haircut

Additional Points:
1. The sum of client collateral retained by the TM/CM and client collateral passed on to
CM/CC shall equal the amount of collateral received by the TM/CM from the client.

2. CMs shall perform validations at their end in respect of reporting done by TMs.