In a bid to promote ease of doing business, capital market regulator SEBI has eased settlement guarantee fund (SGF) norms for commodity exchanges.
The regulator has inserted a new clause to ease SGF based on prevailing market conditions. The modified rules will come into immediate effect.
It has introduced a new provision which states that SEBI, after due deliberation, may grant exemptions or relaxations from the strict enforcement of provisions relating to the SGF in the commodity derivatives segment, on a case to case basis. Such exemptions may be considered after taking into account the prevailing market conditions, the adequacy of applicable risk management framework and keeping in view theoverall objective of investor protection, it said.
Coverage norms
Based on representations received from stakeholders, recommendations of the Risk Management Review Committee and public comments received, Sebi has also modified the provisions contained in respect to Coverage of SGF and Standardised Stress Testing for Commodity Derivatives.
Clearing Corporations will calculate the credit exposure due to simultaneous default of at least three (instead of two earlier) clearing members (and their associates) causing highest credit exposure, it said.