Section 7(4) in The Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012
(4)An applicant seeking recognition as a clearing corporation shall, in addition to conditions as specified in sub-regulations (1) and (2), comply with the following conditions, namely:-(a)the applicant has necessary infrastructure to ensure timely clearing and settlement of trades;(b)the applicant has adequate risk management mechanism;(c)the applicant has a settlement procedure including netting, novation and guarantee for settlement of trades in place, which is in accordance with the manner specified by the Board;(d)the applicant has the capacity to establish a fund to guarantee settlement of trades;(e)the applicant has necessary capability to have a wide network of clearing members and has adequate facility to admit and regulate its members;(f)the applicant has established connectivity with the depositories, clearing banks, stock exchange and clearing members;(g)the applicant has adequate systems' capacity for on-line/real time risk management of trades cleared and settled and is supported by a suitable business continuity plan including a disaster recovery site;(h)the applicant has in its employment, sufficient number of persons having adequate professional and other relevant experience to the satisfaction of the Board;(i)the applicant has the necessary arrangements in place for resolving disputes and redressal of grievances arising out of clearing and settlement of trades;(j)the applicant has an agreement with a depository and with a recognised stock exchange in respect of clearing and settlement of the trades;(k)the business feasibility plan has been appraised by a reputed agency having expertise in securities market; and(l)any other conditions as may be specified by the Board.
