RBI fixes Rs 300 crore net worth criteria for central counterparty applicants

The Reserve Bank connected Monday said an entity seeking authorisation oregon designation arsenic a Central Counterparty (CCP) should person a minimum nett worthy of Rs 300 crore astatine the clip of submitting its application.

CCP means a strategy supplier by mode of novation interposes betwixt strategy participants successful the transactions admitted for settlement. CCP becomes the purchaser to each seller and the seller to each purchaser for the intent of effecting colony of their transactions.

The cardinal slope connected Monday updated its June 2019 norms for Central Counterparties.

According to the revised directions, each authorised CCP has to taxable an audited nett worthy certificate arsenic astatine adjacent of fiscal twelvemonth from the statutory auditor wrong six months of the closure of the fiscal year.

Further, the authorised CCP should beryllium a nationalist institution constricted by shares.

"The shares of an authorised CCP shall beryllium held by persons who are users of the authorised CCP. If a idiosyncratic ceases to beryllium a user, the CCP shall guarantee that the person's shares are divested," the RBI said.

The cardinal banks said a overseas CCP should use to the RBI for support arsenic a recognised CCP for its operations including clearing and colony successful India.

Also, each authorised CCP should represent a regulatory compliance committee chaired by an autarkic director.