Segments

Guaranteed Settlement

Settlement Procedure of IRS Guaranteed Settlement: 

CCIL offers CCP clearing of Rupee denominated IRS and FRA trades referenced to the MIBOR and MIOIS benchmarks, with original maturities ranging from 1 month to 10 years.

Trades referenced to the Modified MIFOR (MMFOR) Benchmark with residual maturity of less than or equal to 5 years are eligible for guaranteed settlement.

Trades are reported in a prescribed format through the Deal Reporting Utility. The trades are validated and matched. Matched trades (having both the counterparties as members of INR IRS GS segment) are subjected to margin adequacy checks on an online basis. Trades supported by adequate margin are guaranteed for settlement. Trades not supported by margins (by either or both counterparties) are kept “Pending” with daily margin check till 2 days prior to next cash flow settlement date. Novation occurs at the point in time when the trade is accepted for guaranteed settlement by CCIL. 

CCIL arrives at the net settlement obligation arising out of cash flows due on the trades of members through multi-lateral netting. The net settlement obligation is settled through the member’s current accounts with RBI.

Institutional Entities like Mutual Funds, Insurance Companies, Pension Funds & Housing Finance Companies – All such entities are eligible to clear their INR-IRS trades linked to MIBOR benchmark with CCIL. Such entities should have SGL account with RBI. The net settlement obligation of such IRS trades is settled through the respective Designated Settlement Bank (DSB).

CCL also offers CCP services to Retail entities like Foreign Portfolio Investors (FPI) and Corporates which are eligible to deal in MIBOR OIS transactions (since November 2020). Such entities can avail CCP services by joining as a Constituent under Clearing Member Structure. It shall be the responsibility of the Clearing Member to ensure that only those entities who are permitted to undertake Rupee Interest Rate Swaps and Forward Rate Agreements as a User are enrolled as a Constituent. Further, the Clearing Member shall be responsible for all the activities on behalf of the Constituents i.e. Trade reporting, deposit of margin and settlement activities.

The settlement obligation position of Constituents shall be netted with the proprietary position of the Clearing Member and shall be settled with RBI. All the information related to Constituents i.e. Matched/Unmatched/Alleged Reports, Obligation Reports, Outstanding Reports shall be provided to the Clearing Member over CCIL Report Browser. The Clearing Member shall in turn provide this information to their respective Constituents.