Segments

Non -Guaranteed Settlement

Settlement Procedure of IRS Non-Guaranteed Settlement

CCIL commenced multilateral net settlement of cash flows arising out of IRS trades on non-guaranteed basis from November 27, 2008. Such net settlement on non-guaranteed basis is continued to be offered for members who have opted for the facility and not opted for Guaranteed Settlement and for trades in benchmarks not included for Guaranteed Settlement for all members. CCIL receives details of trades reported by members in a prescribed format. Trades are validated and matched. Matched trades with status as “TFPR” (Trade for Processing) are eligible for settlement through CCIL on a non-guaranteed basis if both counterparties have availed the facility of non-guaranteed settlement.

CCIL arrives at the settlement obligation of each member through multilateral netting across all trades of members. The final settlement obligation is made available to all members at EOD of the previous business day. The settlement happens at RBI-RTGS on “All or None” basis.

Since July, 2011, CCIL has started Portfolio Compression for non-cleared IRS trades of its members. This exercise is aimed at reducing the overall notional outstanding and the number of outstanding contracts by identifying economically redundant trades for early termination.