International Financial Services Centres Authority (IFSCA) has issued a circular clarifying guidelines on contributions to the Settlement Guarantee Fund (SGF) under the amended IFSCA (Market Infrastructure Institutions) Regulations, 2021. Regulation 15 defines the net worth of Clearing Corporations as the aggregate value of liquid assets, including cash, bank balances, fixed deposits, government securities, and other specified instruments. Regulation 31 specifies that the SGF may receive contributions from Clearing Corporations, Stock Exchanges, and Clearing Members. The circular further clarifies that a Clearing Corporation’s contribution to its SGF will count toward its net worth. Additionally, any interest earned on cash contributions to the SGF will accrue to the SGF and be distributed proportionally among contributors. These guidelines aim to streamline compliance for Clearing Corporations operating in IFSCs. The circular was issued under Section 12 of the IFSCA Act, 2019, and is available on the IFSCA website.
INTERNATIONAL FINANCIAL SERVICES CENTERES AUTHORITY
Circular No. IFSCA/CMD-DMIIT/SGF/2024-25/001 Dated: March 07, 2025
To,
All the Clearing Corporations in the International Financial Services Centres (IFSC)
All the Stock Exchanges in the International Financial Services Centres (IFSC)
All the Clearing Members in the International Financial Services Centres (IFSC)
Dear Sir/Madam,
Sub: Contribution to Settlement Guarantee Fund (SGF)
1. IFSCA has recently notified the amendments to the IFSCA (Market Infrastructure Institutions) Regulations, 2021 (hereinafter referred to as MII Regulations).
2. As per Regulation 15 of the MII Regulations (as amended up to November 01,2024), the net worth for the Clearing Corporation has been defined as under:
‘net worth of a clearing corporation’ means the aggregate value of its liquid assets calculated in the manner as specified by the Authority from time to time.
Further, it has been stated in the MII Regulations that
Cash and bank balance, fixed deposits, Government Securities and other instruments as may be specified by the Authority from time to time shall be considered as ‘liquid assets’ for the purpose of calculation of net worth of a clearing corporation.
3. Regulation 31 of the MII Regulations specifies that the SGF of a Clearing Corporation may have contribution from the Clearing Corporation, Stock Exchange and the Clearing Members.
4. In this regard, it is hereby clarified that the contribution of a Clearing Corporation to its SGF shall be considered as part of its net worth. Additionally, the interest on cash contribution to the SGF shall also accrue to the SGF and pro-rata be attributed to the contributors in proportion to their contribution.
This circular is issued in exercise of powers conferred by Section 12 of the International Financial Services Centres Authority Act, 2019, read with Regulation 72 of the MII Regulations.
A copy of this circular is available on the website of the International Financial Services Centres Authority at www.ifsca.gov.in.
Yours faithfully,
Praveen Kamat
General Manager
Division of Market Infrastructure Institutions and Technology
Capital Markets Department
email: praveen.kamat@ifsca.gov.in
Tel: +91-79-61809820
