Section 18 in Central Electricity Regulatory Commission (Power Market) Regulations, 2010
18. Prudential Norms for establishment of Power Exchange.
- (i) A Power Exchange shall always have a minimum networth of Rs. 25 CroreProvided that the Power Exchange shall always maintain the above networth and in case the same depletes due to payment made by the power Exchange to sellers / buyers in default including by the usage of the SGF impacting its networth, the Power Exchange shall increase its networth to comply with the above networth criteria within 3 months from the date of depletion.Provided that if and when a Power Exchange separates its clearing function to a Clearing Corporation, it shall be required to have a minimum networth of Rs. 5 Crore.Provided further that the Commission may, by general order, review the networth criteria from time to time.(ii)For an applicant the networth to be considered shall be minimum in three years immediately preceding the year in which the application is made or such lesser period during which the applicant may have been incorporated, registered or formed and on the date of special balance sheet accompanying the application for grant of registration(iii)The Networth of a Power Exchange in operation shall be as per the last audited balance sheet.(iv)Settlement Guarantee Fund (SGF)(a)The Power Exchange or Clearing Corporation shall invest the proceeds of SGF in safe investments and ensure that the principal amount is not at risk. Fifty percent (50 %) of the SGF proceeds shall be kept in safe liquid investments.(b)The SGF investment returns shall be retained by the Power Exchange till the Settlement Guarantee Fund is maintained by the Power Exchange. In case of hiving off of the Clearing Corporation, the SGF investment returns shall be retained by the Clearing Corporation.(c)The principles and methods of usage of the SGF shall be clearly communicated to the members and clients of Power Exchange through the bye laws of the Power Exchange.(d)Details of investment of SGF shall be submitted to the Commission on an annual basis while submitting the Power Exchange's annual report or the Clearing Corporations annual report as the case may be(e)Additional Prudential Norms, SGF requirements for Power Exchanges and Clearing Corporations as required for financial derivative contracts on Power Exchanges may be notified by the Commission by order and once these are notified, the same shall be complied with in terms thereof.
