SEBI Revises Core Settlement Guarantee Fund Coverage Norms For Commodity Derivatives Segment

The Securities and Exchange Board of India (SEBI) on Monday issued a circular revising the norms related to Core Settlement Guarantee Fund (Core SGF) in the commodity derivatives segment.

Under the revised framework, clearing corporations must calculate credit exposure assuming the simultaneous default of at least three clearing members (and their associates) causing the highest credit exposure. Earlier, the framework required credit exposure assuming simultaneous default of at least 2 clearing members.

The change has been introduced following stakeholder representations and recommendations of the Risk Management Review Committee, with the objective of facilitating ease of doing business.

The circular also empowers SEBI to grant case-by-case exemptions or relaxations from SGF provisions considering market conditions and investor protection.

The circular has come into force with immediate effect