Acceptance of Fixed Deposit Receipts (FDRs) by Clearing Corporations
Summary
SEBI advises Clearing Corporations to stop accepting Fixed Deposit Receipts (FDRs) issued by trading or clearing members themselves or their associates as collateral. Trading and clearing members must replace such ineligible collateral with other eligible forms within six months of the circular's issuance. Clearing Corporations are directed to implement necessary system changes, amend bye-laws, and report implementation status to SEBI.
Text
Clearing corporation shall not accept Fixed Deposit Receipts (FDRs) from trading/clearing members as collateral, which are issued by the trading/ clearing member themselves or banks who are associate of trading/ clearing member.
for this purpose, 'associate' shall have the same meaning as defined under Regulation 2 (b) of SECC Regulations 2012.
Trading/Clearing Members who have deposited their own FDRs or FDRs of associate banks shall replace such collateral, with other eligible collateral as per extant norms, within a period of six months from the date of issuance of the circular.
take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant bye-laws, rules and regulations;
bring the provisions of this circular to the notice of their members and also disseminate the same on its website;
implement the provisions of this circular and communicate to SEBI the status of implementation.
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 — Acceptance of Fixed Deposit Receipts (FDRs) by Clearing Corporations. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.