Clearing and Settlement of trades in Corporate Bonds through Clearing Corporations
Summary
This circular mandates that all trades in corporate bonds between specified entities must be cleared and settled through NSCCL or ICCL. The provisions apply to corporate bonds traded on OTC platforms or stock exchange debt segments on or after December 1, 2009. Stock exchanges are directed to amend their rules for implementation, while other terms of past circulars remain unchanged.
Text
all trades in corporate bonds between specified entities... shall necessarily be cleared and settled through the National Securities Clearing Corporation Limited (NSCCL) or the Indian Clearing Corporation Limited (ICCL).
The provisions of this circular shall be applicable to all corporate bonds traded Over The Counter (OTC) or on the debt segment of Stock Exchanges on or after December 01, 2009.
All other terms of the past circulars... remain unchanged. While clause IV(7)... which allows bilateral clearing and settlement stands modified accordingly, with effect from December 01, 2009, all other terms of the said circular remain unchanged.
All transactions cleared and settled in terms of this circular will be subject to such norms as may be specified by NSCCL and ICCL.
NSE and BSE are directed to: (a) Make amendments to the listing agreement, bye-laws, rules and regulations for the implementation of the above decision with effect from December 01, 2009... (b) Make necessary arrangements for smooth implementation of this circular.
All specified entities are advised to make necessary preparations for implementation of the provisions of this circular.
All stock exchanges are advised to bring to the notice of all their members and to disseminate the same on their respective websites for easy access to investors.
This circular is issued in exercise of powers conferred by sub-section (1) of section 11 and section 11A of the Securities and Exchange Board of India Act, 1992...
Source: SecMarx — Clearing and Settlement of trades in Corporate Bonds through Clearing Corporations. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.