Interoperability is a mechanism that allows brokers to choose any clearing corporation to settle their trades, irrespective of the exchange where they executed their trades.
Currently, trades executed on the NSE are cleared and settled only through its subsidiary — NSE Clearing. Transactions on the BSE are settled through its subsidiary — Indian Clearing Corporation Ltd (ICCL). Thus, participants who trade on multiple exchanges had to necessarily arrange for margin and capital separately at each of the stock exchanges. This resulted in inefficient use of capital and high costs. Hence SEBI’s decision to link all the clearing corporations in the securities market and allow consolidation of the clearing and settlement function at any one of them. We have chosen NCL (NSE Clearing Limited), formerly known as NSCCL, to clear the trades.
As per the mandate received by SEBI, all clearing members should compulsorily migrate to new frame work by July 15th, 2019. In order maintain the smooth functionality of the new framework, we have started operationalizing clearing under interoperability from July 8th, 2019.
How does this benefit?
- It would lead to efficiency in capital deployment and save costs.
- An investor trading through the same broker across exchanges will be eligible for netting the benefits for his trades in a given security across the exchanges.
- All trades of NSE cash and BSE cash are shown in NSE or BSE segment as per the exchange enable by you. The same way NSE FNO and BSE FNO shall be combined. NSE Currency and BSE currency trades shall be clubbed. Please note we do not provide BSE FNO and BSE currency segment, explained for your understanding.
- Simple format contract note.
Click here to find the sample contract note with interoperability changes.