Bullion as collateral
Summary
SEBI modifies the risk management framework for national commodity derivatives exchanges by increasing the limit for total commodities collateral from 15% to 30% of a clearing member's liquid assets. The revised rule stipulates that non-bullion collateral within this total must not exceed 15% of the total liquid assets. Exchanges are required to ensure timely liquidation of collaterals and disseminate these provisions to their members.
Text
Total commodities collateral for any clearing member shall not exceed 30% of the total liquid assets of the clearing member, out of which non-bullion collateral shall not exceed 15% of the total liquid assets of the clearing member
Exchanges shall make necessary arrangements to enable timely liquidation of collaterals accepted by them and may stipulate concentration limits for collateral at member level/across all members as may be necessary based on their risk perception, capability to hold and arrangements for timely liquidation
The exchanges are advised to bring the provisions of this circular to the notice of their members and also to disseminate the same on their website
This circular is issued in exercise of the 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 — Bullion as collateral. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.