The International Financial Services Centres Authority on 15th September 2021 has notified the conditions for a non-bank entity that is permitted to become a Clearing Member of a Clearing Corporation in GIFT-IFSC.
Any non-bank entity recognized as a custodian of assets/securities by IFSCA through the branch structure, shall be permitted to become a Clearing Member of a Clearing Corporation in GIFT-IFSC. For this purpose, the entity shall comply with the following conditions:
- The entity should be ring fenced financially, technologically, and operationally from its parent company and its functions, as a clearing member, shall be limited only to clearing and settlement services of its custodial clients.
- The entity can clear and settle trades only of its custodial clients
- The entity shall ensure financial segregation by allocating funds to the tune of USD 1,500,000 (USD 1.5 mn) towards its clearing and settlement operations.
- The entity shall participate in the Settlement Guarantee Fund contribution (SGF), as decided by the clearing corporation from time to time.
- The entity shall have adequate mechanisms for the purposes of reviewing, monitoring, and evaluating the controls, systems, procedures and safeguards.
- The entity shall comply with all the necessary rules, bye-laws and guidelines prescribed by the clearing corporation with which it is registered as a clearing member and the Authority from time to time.
