In pursuance of Rule 2.3 of Chapter IV of the Rules of the Clearing Corporation, details of security deposit to be maintained as Liquid Networth are specified as under:

Liquid Networth shall be computed as total liquid assets less initial margin payable at any point in time. The clearing member shall meet with the liquid networth requirements prescribed by the Clearing Corporation at all points of time.

1. Minimum liquid networth requirement for clearing members:
   Every clearing member of the Clearing Corporation is required to maintain a minimum liquid networth of Rs.50 lakhs with the Clearing Corporation in the following manner:
   (a) Rs.25 lakhs in the form of cash and
   (b) Rs.25 lakhs in any one or combination of the forms of collaterals accepted towards liquid assets.





2. Clearing member deposit for trading members whose deals they clear and settle:
   In addition to the requirements specified above every clearing member is required to maintain a deposit of Rs.10 lakhs each, in respect of every trading member whose deals such clearing members undertake to clear and settle, in the following manner:
   (1) Rs.2 lakhs to be maintained in the form of cash.
   (2) Rs.8 lakhs to be maintained in any one or combination of the forms of collaterals accepted towards liquid assets.

Non-fulfilment of Security Deposit Requirements

Any failure on the part of a clearing member to meet with the deposit requirements as given above in point number 1 and 2, at any point of time, will be treated as a violation of the Rules, Bye-Laws and Regulations of the Clearing Corporation. In such case the clearing corporation may initiate suitable action as given below or as prescribed by the relevant authority from time to time.

1. If the security deposit shortage is equal to or greater than Rs. 5.00 lakhs, the Clearing Corporation may advise the Exchange to withdraw any or all of the membership rights of the clearing member including the withdrawal of trading facilities of all trading members and/ or clearing facility of custodial participants clearing through such clearing members.





2. If the security deposit shortage is less than Rs. 5.00 lakhs, the member would be given one calendar week’s time to replenish the shortage and if the same is not done within this timeframe, Clearing Corporation may advise the Exchange to withdraw any or all of the membership rights of the clearing member including the withdrawal of trading facilities of all trading members and/ or clearing facility of custodial participants clearing through such clearing members.

In addition, the outstanding positions of such clearing member and/ or trading members and/ or constituents, clearing and settling through such clearing member, may be closed out forthwith or any time thereafter by the Exchange, at the discretion of the Clearing Corporation, to the extent possible, by placing at the Exchange, counter orders in respect of the outstanding position of such clearing member without any notice to the clearing member and/ or trading members and/ or constituents, and such action shall be final and binding on the clearing member and/ or trading members and/ or constituents. Clearing Corporation may also initiate such other risk containment measures as it deems fit with respect to the open positions of the clearing member and/ or trading members and / or constituents.

Clearing Corporation may, in addition to the foregoing provisions, take additional measures like, imposing penalties, collecting appropriate deposits, invoking bank guarantees/ fixed deposit receipts, realising money by disposing off the securities and exercising such other risk containment measures as it deems fit and may further take such disciplinary action as it may deem fit and appropriate in this regard.