Revision in Haircut on Central Government Securities (G-Sec) accepted as Collateral
Summary
SEBI has revised the minimum haircuts applicable to Central Government Securities accepted as collateral by recognized Clearing Corporations. The new haircut rates are set at 2%, 5%, and 10% based on the liquidity and residual maturity of the securities. The classification of these securities is subject to monthly review with changes implemented from the first day of the following month.
Text
Para 2 of Annexure – I to the Circular stands modified as far as it relates to the haircut on Central Government Securities, as under: S.No. A Treasury Bills, and Liquid* Government of India Dated Securities having residual maturity of less than 3 years 2%; B Liquid* Government of India Dated Securities having residual maturity of more than 3 years 5%; C For all other Semi-liquid* and Illiquid* Government of India Dated Securities 10%
The classification of the Government of India Dated Securities, as above, shall be reviewed on 15th of every month. The revision in classification, if any, shall be implemented with effect from 1st of the next month.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Revision in Haircut on Central Government Securities (G-Sec) accepted as Collateral. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.