The Clearing Corporation of India Limited (CCIL), on December 30, 2025, notified regarding the review of the Provisions for Capped Member liability on account of Default Fund replenishment in the clearing segments.
The following has been stated namely: -
• CCIL is a Qualified Central Counterparty (QCCP) regulated by the Reserve Bank of India and is thus compliant with CPMI IOSCO’s Principles for Financial Market Infrastructures (PFMI). In terms of the PFMI, CCIL maintains prefunded resources to cover the potential losses arising from participant default. These comprise CCIL’s own funds set aside for this purpose (known as its ‘Skin in the Game’) and a Default Fund contributed by members under the principle of loss mutualization. The size of the Default Fund is based on the hypothetical losses on member portfolios under stress condition.
• The current cap on member liability for default fund replenishments is triggered on Member resignation and a member can tender his resignation only on “Loss Threshold” getting reached due to default fund replenishments.
• It is now proposed that the capped limit to meet default fund replenishments for members for a single or multiple defaults be set independent of a member’s resignation. The capped limit within the next 30-day period will be set at five times a Member’s default fund contribution determined at the start of the 30-day period.
