Segregation of client collateral: mandatory reporting, allocation controls and a staged default management regime to protect client assets. SEBI prescribes a framework mandating daily disaggregated reporting of client collateral by TMs to CMs and by CMs to SEs/CCs, client-accessible portals, strict allocation procedures with CM/CC validations, and rules that allocated collateral plus securities re-pledged are used to meet client margins in a prescribed blocking order. CMs must maintain at least 50% cash-equivalents at the CM level, permit allocation changes subject to adequacy, and follow a four-stage default management process (settlement, portability/return, close-out/provisional appropriation, final attribution) with the CC default waterfall as fallback.
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Segregation of client collateral: mandatory reporting, allocation controls and a staged default management regime to protect client assets.
SEBI prescribes a framework mandating daily disaggregated reporting of client collateral by TMs to CMs and by CMs to SEs/CCs, client-accessible portals, strict allocation procedures with CM/CC validations, and rules that allocated collateral plus securities re-pledged are used to meet client margins in a prescribed blocking order. CMs must maintain at least 50% cash-equivalents at the CM level, permit allocation changes subject to adequacy, and follow a four-stage default management process (settlement, portability/return, close-out/provisional appropriation, final attribution) with the CC default waterfall as fallback.
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