2017年-世界发展银行全球_India_Financial_Sector_Assessment_Program___Detailed_Assessment_of_Observance_of_Clearing_Corporation_of_India_Limited_Central_Counterparty_and_Trade_Repository_128页_2mb

Summary of the CPMI-IOSCO Financial Sector Assessment Program on India's Clearing Corporation of India Limited (CCIL)

Core Content

This document presents a detailed assessment of the observance of the Clearing Corporation of India Limited (CCIL)'s Central Counterparty (CCP) and Trade Repository (TR) systems, as well as the responsibilities of regulatory authorities, in accordance with the CPMI-IOSCO Principles for Financial Market Infrastructures (PFMIs). The assessment was conducted as part of the India Financial Sector Assessment Program (FSAP) in March 2017 and focuses on the systemic importance of the clearing and settlement systems for government securities, money market instruments, forex instruments, and Rupee derivatives.

Main Points

1. Overview of India's Securities and Derivatives Clearing and Settlement Systems

India's securities and derivatives markets are segmented into three categories:

• Government securities, money market instruments, forex instruments, and Rupee derivatives
• Corporate securities and financial derivatives
• Commodity derivatives

The assessment primarily focuses on the first category due to its systemic importance in the interbank money markets. Different legal frameworks, regulatory bodies, and clearing and settlement systems exist for each category.

2. CCIL Overview

CCIL was established in April 2001 to provide clearing and settlement services for debt, money, forex, and derivative markets in India. It is a public limited company under the Companies Act, 1956, and its ownership is split among banks (62.50%), financial institutions (20.50%), and primary dealers (17.00%).

CCIL operates as a Central Counterparty (CCP) and is authorized to provide Trade Repository (TR) services for various markets. It also functions as a Qualified CCP (QCCP) and is subject to RBI regulation under the Payment and Settlement Systems Act (PSSA), 2007, with a 2015 amendment extending its role to include trade repositories.

3. CCIL's Services

CCIL offers clearing and settlement services across multiple market segments:

• Government securities (Outright & Repo)
• Collateralized Borrowing and Lending Obligations (CBLO)
• Forex (Cash, TOM, Spot, Forward)
• Rupee derivatives (Interest Rate Swaps (IRS) & Forward Rate Agreements (FRA))
• CLS Bank (Continuous Linked Settlement)

In the CLS segment, settlements are non-guaranteed, while in all other segments, CCIL acts as a CCP and guarantees settlement.

4. CCIL's Operational Framework

CCIL provides a risk management framework that includes:

• Intra-day MTM and volatility margin collection
• A default handling waterfall
• Collateral pools managed through the Settlement Guarantee Fund (SGF)
• A Settlement Reserve Fund (SRF) to cover credit losses and liquidity needs

Participants contribute to the Default Fund (DF) based on their exposure and system throughput. The DF is sized to cover the stress-tested credit exposures of the largest participant and the five weakest participants.

5. Legal and Regulatory Framework

• CCIL is regulated by the Reserve Bank of India (RBI) under the PSSA and its associated regulations.
• The Securities and Exchange Board of India (SEBI) regulates the stock exchanges and clearing corporations.
• The Financial Stability and Development Council (FSDC) coordinates between RBI and SEBI for FMIs oversight.

6. Key Findings on CCP Observance

CCIL observes 21 out of 24 PFMIs, with 3 principles not applicable. Areas for improvement include:

• Legal framework: CCIL should assess the materiality of provisions to cancel or revoke admitted trades based on fraud, misrepresentation, or material mistake.
• Risk Management Framework: CCIL should explicitly recognize risks from its subsidiary platforms and adopt a comprehensive recovery plan.
• Credit Risk Management: CCIL could enhance its stress testing framework by excluding MTM and volatility margin calls from the largest participant.
• Liquidity Risk Management: CCIL should include more adverse scenarios in liquidity stress testing, such as the failure of settlement banks or participants.
• Default Management and Segregation: CCIL needs to implement a segregation and portability framework for customer funds and assets in the government securities market, referencing applicable regulations.
• Operational Risk: CCIL should incorporate additional scenarios into its Business Continuity Plan (BCP) to ensure achievement of Recovery Point Objective (RPO) and Recovery Time Objective (RTO).
• Tiered Participation: CCIL should study the prevalence of transactions on behalf of constituents and institute monitoring mechanisms for tiered participation.
• Efficiency and Effectiveness: CCIL could introduce annual participant surveys to gather feedback and improve services.

7. Key Findings on TR Observance

CCIL observes 11 out of 14 PFMIs for its TR services, with 1 partially observed and 2 not applicable. Areas for improvement include:

• Legal framework: CCIL should establish specific operating regulations for TR services and update its Bye-laws and Rules (BRR).
• Operational risk management: TR services should be fully integrated into the BCP.
• Efficiency: CCIL should conduct user satisfaction surveys and seek inputs for product enhancement.

8. Responsibilities of Authorities

The assessment of the responsibilities of regulatory authorities concludes that 4 out of 5 are observed, and 1 is broadly observed. Areas for improvement:

• Regulatory and supervisory powers: SEBI should evaluate if it has the capacity to fully meet its oversight responsibilities, especially with the commodity derivatives market now under its supervision.
• Application of PFMIs: Both RBI and SEBI should progress with assessing all FMIs under their purview, including CSDs.
• Cooperation with other authorities: A cooperation framework should be strengthened to share data and information between RBI and SEBI in normal and crisis situations.

Key Information

• CCIL is the central clearing and settlement body for government securities, forex, and derivatives.
• CCIL acts as a CCP for most segments, with non-guaranteed settlement in the CLS segment.
• RBI is the regulator of CCIL under the PSSA.
• SEBI oversees stock exchanges and clearing corporations.
• PFMIs are the benchmark standards for assessing FMIs in India.
• The assessment methodology is based on the CPMI-IOSCO publication from December 2012.

Conclusion

The assessment concludes that CCIL's CCP and TR systems are generally well-structured and compliant with PFMIs. However, there are areas for improvement, particularly in legal framework, risk management, operational continuity, and regulatory oversight. The RBI and SEBI are encouraged to strengthen their regulatory frameworks and enhance cooperation to ensure the stability and efficiency of India's financial market infrastructures.