• IND SEBI formed an ad-hoc expert committee to review ownership and economic structure of clearing corporations and the committee will be chaired by Usha Thorat.
• The ad-hoc expert committee will also suggest measures to ensure that clearing corporations function as resilient, independent, and neutral risk managers.

Background

• The committee was set up given the substantial increase in trading volumes noted in recent years and growing interest amongst a wide category of investors.
• This is particularly in the derivatives segment, where clearing corporations should change their settlement guarantee funds as they are dependent on parent exchanges.
• IND SEBI sees that clearing corporations have been primarily dependent on the parent exchange for infusion of capital towards augmenting its settlement guarantee fund.

Terms of Reference

• The committee may examine the feasibility and desirability of broadening the extant list of eligible investors which are allowed to take shareholding in clearing corporations.
• As well as suggest categories of investors who can acquire shareholding in clearing corporations, and suggested alternatives should keep in view of periodic capital needs.
• The committee should examine the need for altering the caps on shareholding of various entities in a clearing corporation while keeping in view market liquidity needs.