Acceptance of foreign sovereign securities as collateral permitted subject to safeguards, liquidation rights, valuation haircuts and concentration limits. AAA-rated foreign sovereign securities may be accepted as collateral from FIIs for exchange-traded derivatives subject to written agreements preserving jurisdiction or arbitration and rights to liquidate on default. Clearing members and clearing corporations must ensure availability for timely liquidation despite overseas intermediaries, apply appropriate haircuts (fixed or VaR-based) using market prices converted daily at the RBI Reference rate, and treat such securities as part of the cash component of liquid assets subject to a ten percent concentration limit.