The exchanges and CCs were supposed to obtain an undertaking-cum-indemnity bond from the trading members within 90 days from the date of Sebi's circular issued on July 1.
Amid the prevailing situation due to the COVID-19 pandemic, markets regulator Sebi on Thursday extended till October 31 the deadline for submission of undertaking-cum-indemnity bond by trading and clearing members for their bank accounts. Through a circular, the regulator has also provided flexibility to the exchanges and clearing corporations for modifying the undertaking-cum-indemnity bond and draft undertaking wherever required.
As per the standard operating procedures (SOPs) issued by Sebi, trading and clearing members are required to provide a list of all their bank accounts to the stock exchanges and clearing corporations (CC). The exchanges and CCs were supposed to obtain an undertaking-cum-indemnity bond from the trading members within 90 days from the date of Sebi’s circular issued on July 1.
However, in view of the prevailing situation due to the pandemic and representation received from the stock exchanges, Sebi decided to extend the timeline for such submissions.
In July, Sebi came out with an SOP that enumerates actions that need to be taken when a stock exchange or a clearing corporation is of the view that a trading or a clearing member is likely to default in repayment of funds or securities to its clients.