Sebi asks clearing corporations to invest in FDs, debt MFs

NEW DELHI: To ensure the “highest degree of safety”, Sebi on Wednesday asked clearing corporations to invest their money broadly in fixed deposits, government securities and liquid schemes of debt mutual funds.

The market regulator has issued the circular in this regard after taking into consideration the recommendations made by an expert panel on issues pertaining to investment policy of clearing corporation.

Clearing houses are associated with an exchange to handle the confirmation, settlement and delivery of transactions, fulfilling the main obligation of ensuring transactions in a prompt and efficient manner.

While framing the ‘investment policy’, the clearing corporations will have to consider highest degree of safety and least market risk, Securities and Exchange Board of India (Sebi) said.

The investments need to be broadly in fixed deposits, central government securities and liquid schemes of debt mutual funds.

These fixed deposits should be made with banks having a net worth of more than Rs 500 crore.