Introduction | Composition | Work Process | Corporate Actions and Benefits | List of Eligible Securities | Link for eNotice and format of Notice of Deposit and Withdrawal |

Introduction :

With a view to meet losses arising out of members’ Default CCIL has instituted following six default funds

•    * Securities (outright and Market Repo)
•    * Forex Settlement
•    * Forex Forward Segment
•    * Rupee Derivatives – MIBOR and MIOIS
•    * Rupee Derivatives – MIFOR  

Though the default funds belong to distinct business segments the composition, work flow process, interest payment rules, etc are identical for all default funds.

The default funds are established to meet losses  arising out of members’ default. The purpose and process of default funds computation is detailed under Risk Management.

Members are required to contribute the amount as notified by CCIL to the respective default fund. The DF contributions are maintained distinctly however some benefit shall available to members in terms of Default Fund – Optimisation process.

Compositions

Default Fund contribution is received from members in Cash (INR) and eligible government of India securities / treasury bills. Members have the option to maintain their entire SGF contribution in the form of Cash.

The cash : securities ratio towards default funds requirement is 5:95 i.e. minimum 5% of default funds requirement needs to be maintained in cash.

Members of respective business segment are required to maintain minimum collateral contribution as notified by CCIL towards the concerned default fund.

Work Process

The securities towards Default Funds are accepted in CCIL’s Constituent Subsidiary general Ledger account maintained with Public Debt Office of Reserve Bank of India. The securities are transferred from members’ SGL / CSGL account to the above referred CSGL Account of CCIL on a Value Free basis using the eKuber System of Reserve Bank of India.

The cash is transferred by members to CCIL’s bank account wherein the concerned members settles the funds obligations. Members settling at RBI transfer the cash to CCIL’s RTGS Settlement Account whereas the members transfer the cash contribution to CCIL’s account with respective Settlement bank.

The refund of securities / cash are effected by CCIL from its CSGL account / RTGS Settlement account with RBI or its funds account with settlement banks.

Members desirous of making cash / securities contributions to DFs are required to initiate a value free transfer / funds transfer and intimate CCIL about the same using the eNotice System or a physical notice of deposit in a prescribed format (incase of non-availability of eNotice) within the cut off time prescribed for the purpose.

The URL for accessing eNotice System is

https://enotice.ccilindia.com/ERCS/#

Members desirous of making cash / securities withdrawal from  DFs are required to initiate a withdrawal request using eNotice System ot a physical notice of withdrawal (incase of non-availability of eNotice) within the cut off time prescribed for the purpose. The securities refund can be effected on the day of notice or Notice + business 1 day as requested by member. All cash withdrawals are on Notice + business1 day basis.

CCIL has issued detailed Collateral Work Flow process for DFs and the same is amended periodically. The latest Default Fund related Notifications are available under tab for each business segment under URL

https://www.ccilindia.com/Pages/SEC_Notifications.aspx

Corporate Actions and Benefits

All corporate actions on member DF holdings are serviced through the RTGS System of Reserve Bank of India and net banking system(s) of settlement banks. Relative funds are remitted to the RTGS Settlement / Current Account of concerned members with separate individual electronic advices to members

DF – Cash – Interest Payment

Members are entitled for interest on their cash collateral contribution utilised towards margin requirement in each of the segments, based on the applicable interest payment rules. The rules for such interest payment are laid down as per CCIL’s Regulations and notifications issued in this regard. The interest is paid on a quarterly basis at a rate notified by CCIL.

Part V of the above notification(s) covers interest payment process towards Default Fund

DF– Securities – Interest Payment

 Periodic coupon payments received in respect of Members’ DF security contributions (held in the form of dated securities) are passed on to concerned Members by CCIL immediately upon receipt of relative interest from Reserve Bank of India. The interest is paid to members’ RTGS Settlement account or current account with settlement bank as recorded with CCIL.

DF – Securities – Redemptions

Redemption proceeds of matured securities / treasury bills  are treated as concerned members’ additional cash contribution to DF.

 List of Eligible Securities