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Consider the following statements regarding Clearing Corporation of India Limited (CCIL):
- It provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.
- It is the trade repository for all Over-the-Counter (OTC) transactions in the Forex market.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding Clearing Corporation of In...
Clearing Corporation of India Limited (CCIL):
The Clearing Corporation of India Limited (CCIL) is a central counterparty and trade repository for various financial markets in India. It provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.
Statement 1: CCIL provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.
This statement is correct. CCIL is responsible for clearing and settlement of transactions in various financial markets in India. It acts as a central counterparty and provides risk management services, including novation, settlement, and collateral management, for money market instruments, government securities (G-Secs), foreign exchange (forex), and derivative products.
Statement 2: CCIL is the trade repository for all Over-the-Counter (OTC) transactions in the Forex market.
This statement is also correct. CCIL serves as the trade repository for all OTC transactions in the Forex market. It collects and maintains data on OTC transactions, which helps in enhancing transparency, risk management, and regulatory oversight in the forex market.
Conclusion:
Both statements are correct. CCIL plays a crucial role in providing clearing and settlement functions for various financial markets in India, including money market, G-Secs, forex, and derivatives. It also acts as the trade repository for all OTC transactions in the forex market.
The Clearing Corporation of India Limited (CCIL) is a central counterparty and trade repository for various financial markets in India. It provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.
Statement 1: CCIL provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.
This statement is correct. CCIL is responsible for clearing and settlement of transactions in various financial markets in India. It acts as a central counterparty and provides risk management services, including novation, settlement, and collateral management, for money market instruments, government securities (G-Secs), foreign exchange (forex), and derivative products.
Statement 2: CCIL is the trade repository for all Over-the-Counter (OTC) transactions in the Forex market.
This statement is also correct. CCIL serves as the trade repository for all OTC transactions in the Forex market. It collects and maintains data on OTC transactions, which helps in enhancing transparency, risk management, and regulatory oversight in the forex market.
Conclusion:
Both statements are correct. CCIL plays a crucial role in providing clearing and settlement functions for various financial markets in India, including money market, G-Secs, forex, and derivatives. It also acts as the trade repository for all OTC transactions in the forex market.
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Community Answer
Consider the following statements regarding Clearing Corporation of In...
The Reserve Bank of India (RBI) and the Bank of England (BoE) recently signed a Memorandum of Understanding (MoU) for cooperation and exchange of information in relation to the Clearing Corporation of India Limited (CCIL).
About Clearing Corporation of India Limited (CCIL):
- It was set up in April, 2001 to provide guaranteed clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.
- CCIL also provides non-guaranteed settlement for Rupee interest rate derivatives and cross-currency transactions through the CLS Bank.
- Promoters: State Bank of India, IDBI Bank Ltd, ICICI Bank Ltd, Life Insurance Corporation of India (LIC), Bank of Baroda and HDFC Bank Ltd.
- The Company was incorporated with an authorized equity share capital of Rs. 50 Crores.
- CCIL’s adherence to the stringent principles governing its operations as a Financial Market Infrastructure (FMI) has resulted in its recognition as a Qualified Central Counterparty (QCCP) by the Reserve Bank of India in 2014.
- It has also set up a Trade Repository to enable financial institutions to report their transactions in Over-the-Counter (OTC) derivatives.
- Through its fully owned subsidiary, Clearcorp Dealing Systems Limited (CDSL), CCIL has introduced various platforms for electronic execution of deals in various market segments.
- Further, CDSL has developed, implemented, and manages the NDS-OM, the RBI-owned anonymous electronic trading system for dealing in G-Secs and also for reporting OTC deals, as well as the NDS-CALL platform, which facilitates electronic dealing in the Call, Notice & Term Money market.
- CCIL is also the trade repository for all OTC transactions in the Forex, Interest Rate and Credit derivative transactions.
Hence both statements are correct.
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Consider the following statements regarding Clearing Corporation of India Limited (CCIL): It provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets. It is the trade repository for all Over-the-Counter (OTC) transactions in the Forex market.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
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