In pursuance of the regulations of SEBI, Bye- laws, Rules and Regulations of NCCL, NCCL has defined norms and procedures for acceptance of liquid assets haircuts, and limits applicable to Members and their clients.

Member may deposit liquid assets in the form of cash, bank guarantees, fixed deposit receipts and approved securities and any other form of collateral as prescribed by NCCL and/ or SEBI from time to time.

These liquid assets are segregated as cash, cash equivalent and Non Cash Collaterals (Other Deposits).Cash equivalent shall mean bank guarantees, fixed deposit receipts and any form of collateral as may be prescribed from time to time. Non Cash Collaterals (Other Deposits) shall mean all other form of collateral deposits like approved list of dematerialized securities (equity shares), mutual fund units as per approved list, warehouse receipt(s) of approved commodities issued by designated warehouse/ vault and any other form of collateral as may be prescribed from time to time.  

The types of liquid assets acceptable by NCCL from their members and the applicable haircuts and concentration limits are listed below:

Liquid assets are classified into two components:

I. Cash Equivalents
Cash Equivalents consists of:

  • Cash
  • Bank fixed deposits
  • Bank guarantees

II. Other Liquid Assets
Other liquid Assets consists of

  • Liquid Equity Shares
  • Mutual fund units
  • Bullion
  • Gold ETF
  • Agricultural Commodities

Cash equivalents shall be at least 50% of liquid assets. This would imply that Other Liquid assets in excess of the total Cash Equivalents would not be regarded as part of member’s liquid assets as well as total liquid assets.

Sr No Item Minimum Haircut Limits
Cash equivalents
1 Cash 0 No Limit
2 Bank fixed deposits 0
Limit on exposure to a single bank as decided by NCCL from time to time.
3 Bank guarantees 0
Other Liquid assets
Sr No Item Minimum Haircut Limits
4 Liquid (Group-I) Equity shares For Nifty 50 VaR OR 15% Whichever is higher, for others of Nifty 500 2times VaR or 40% whichever is higher Limit on exposure to a single issuer shall be Rs 35 crores.
5 Mutual fund units VaR or 40% whichever is higher. Limit on exposure to a single asset management company shall be Rs 10 crores.
6 Bullion 20%
Total commodities collateral for any clearing member shall not exceed 15% of the total liquid assets (except bullion) 30% of the total liquid assets (including bullion)
7 Gold ETF 20%
8 Agricultural Commodities (See Note) 40%

Note:

  • The approved agricultural commodities as collateral shall be permitted to a maximum of Rs. 7.50 Crore (after haircut) as part of Additional Base Capital for a member.
  • A maximum value of Rs. 75 Crore (after haircut) of select approved agricultural commodities shall be permitted to be accepted as collateral across all members of NCCL.

NCCL shall accept liquid assets as collateral only as per the list of liquid assets specified in the table above. However, NCCL may decide not to accept certain types of liquid assets specified in the above list based on their risk perception, capability to hold and arrangements for timely liquidation. NCCL may stipulate concentration limits at member level / across all members as may be necessary.