IFSCA has vide its circular dated 17th September, 2021 allowed all members of stock exchanges and clearing corporation in the IFSC to become automatic members of the bullion exchange and bullion clearing corporation. All new members will have to follow the registration criteria and make fresh applications in this regard.
The existing members will be added subject, of course, to fulfilling the net worth criteria as is specified by the bullion exchange.
On-Boarding of existing registered members in GIFT-IFSC
IFSCA has received representation from market participants requesting for all registered trading members and clearing members of the stock exchanges and clearing corporations respectively to be grandfathered as members of the Bullion Exchange and Bullion Clearing Corporation. Accordingly, it has been decided to permit all members of the stock exchanges and clearing corporations in GIFT-IFSC to be enabled as Bullion Trading/ Clearing Members subject to the fulfilment of requisite net worth criteria as specified by the Authority. New entities desirous of operating as Bullion Trading/Clearing Members
New entities who intend to become Bullion Trading/Clearing Members shall follow the membership criteria and registration process for membership as determined by the Bullion Exchange /Bullion Clearing Corporation, subject to eligibility criteria as specified in IFSCA circular No. 415/IFSCA/Consolidated Operating Guidelines/2021-22 dated August 25, 2021. Net-Worth criteria
The net worth requirement for initial 6 months from the date of operationalization of Bullion Exchange shall be as under:
Base Minimum Capital
The Base Minimum Capital for initial 6 months from the date of operationalization of Bullion Exchange shall be as under:
Any entity desirous of operating as Bullion Trading/Clearing Member shall be a body corporate, incorporated in India or in a foreign jurisdiction.
Any entity desirous of functioning as a trading member / clearing member under the branch structure in GIFT-IFSC shall adequately ring fence the operational, technology and financial aspects of its branch in IFSC from its overseas operations.
SEBI has vide its circular dated 6th January, 2021 laid down guidelines for refund of security deposit of trading members on surrender of their membership. The salient features are as follows:
In this regard, following is advised to all exchanges regarding refund of security deposit on surrender of membership by Trading Members: A. On approval of application for surrender of Trading Member’s registration by SEBI, the Exchange shall release Security Deposit of the Trading Member (engaged in trading on behalf of clients) after the period mentioned at point a) or b), whichever is earlier: (a) Three years from the date of receipt of surrender application by Exchange from the Trading Member (in order to meet any investor claims), or (b) Five years from the date of disablement of Trading Member’s trading terminals by the Exchange. B. On approval of application for surrender of Trading Member’s registration by SEBI, the Exchange shall release Security Deposit of the Trading Member (engaged only in proprietary trading in last three years prior to the date of application) after the period mentioned at point a) or b), whichever is earlier: (a) one year from the date of receipt of surrender application by exchange from the Trading Member, or (b) three years from the date of disablement of Trading Member’s trading terminals by the Exchange.
SEBI circular dated 1st October, 2020 giving more time upto 31st October, 2020 to trading member/ clearing members to submit indemnity bond cum undertaking to the stock exchanges. Also stock exchanges have been given leeway to modify the draft of the undertaking wherever required. Gist of the circular follows
In terms of clause 9 of SEBI circular SEBI/ HO/ MIRSD/ DPIEA/ CIR/ P/ 2020/115 dated July 01, 2020 on the captioned subject, TMs / CMs are required to provide a list of all their bank accounts to the Stock Exchanges (SEs) / Clearing Corporations (CCs) and the SEs / CCs shall obtain an Undertaking cum Indemnity bond from the TM within 90 days from the date of the said SEBI circular.
In view of the prevailing situation due to Covid-19 pandemic and representation received from the Stock Exchanges, it has been decided to extend the timeline for submission of the Undertaking cum Indemnity bond by the TM / CM for all the bank accounts by a period of one month i.e. till October 31, 2020.
It has also been decided to provide flexibility to the SEs / CCs for modifying the Undertaking cum Indemnity bond they need to take from TMs / CMs and suitably modify the draft undertaking wherever required.
Stock Exchanges and Clearing Corporations are directed to bring the provisions of this circular to the notice of their members and also disseminate the same on their websites.