The Securities and Exchange Board of India vide its notification dated 6th November 2020 has permitted limited purpose clearing corporation to enter into outsourcing agreements with existing Clearing Corporations for the purpose of using their core and critical IT support infrastructure/activities for running the core activities of the LPCC and related operation.
The LPCC shall enter into necessary agreements with the Stock Exchanges where it proposes to offer clearing /settlement of repo transactions and their associated Clearing Corporations for continuity purposes.
The transactions would be executed on the platform of exchanges. As part of the risk management process, the LPCC would define the risk management parameters, such as eligible bonds ISINs, applicable margins, type of collateral, the quantum of collateral, etc.
Further, for the purpose of margin blocking, collateral management, pay-in and pay-out of funds and securities, separate bank and Demat accounts would be opened by the LPCC.
