SEBI issues new guidelines for LPCC's SGF, adjusting direct participant's risk-based contributions and establishing a 'default waterfall' system for default losses.
Securities and Exchange Board of India (SEBI) released new guidelines for the core settlement guarantee fund (SGF) of the Limited Purpose Clearing Corporation (LPCC), a clearing and settlement entity for repo transactions. Direct participants' risk-based contributions will be equivalent to the deficit in the minimum required corpus (MRC) after issuer and clearing member contributions. Contributions can be collected upfront or in a staggered manner. SEBI also established guidelines for the 'default waterfall' system, which allocates financial resources for default losses.
June 20, 2024
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