Interoperability framework for clearing corps soon

Sebi is in the process of putting in place a framework for interoperability among clearing corporations — a move that will reduce trading cost.

At present, different bourses have their own clearing corporations to handle settlement of trades on the respective stock exchanges.

The interoperability will permit trading members to clear trades through a firm of their choice, instead of going through the clearing corporation owned by the bourse on which the trade was executed.

“The regulator is in the process of developing a framework to enable interoperability among clearing corporations to ensure cost advantages for members, in the form of enhanced margin utilisation, opportunities of best execution across trading platforms, as well as savings on cost associated with membership,” Sebi said in its annual report for 2017-18.

The move assumes significance in the wake of disruptions in the functioning of a stock exchange and the respective clearing corporation in the recent past.

In August 2015, Sebi had decided to hold public consultations on a new set of norms to enable interoperability of clearing corporations.

A committee chaired by K V Kamath had recommended interoperability among clearing corporations. The major exchanges in the country BSE and NSE both have their own clearing corporation arms.