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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...
Introduction:
Clearing Corporation of India Limited (CCIL) is a central counterparty and clearing house for various financial markets in India. It provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets. CCIL plays a crucial role in ensuring the safety and efficiency of financial transactions.
Statement 1: It provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.
CCIL's primary function is to act as a central counterparty for various financial markets. It provides clearing and settlement services for transactions in Money, Government Securities (G-Secs), Foreign Exchange, and Derivative markets. Clearing refers to the process of matching and netting trades, while settlement involves the actual transfer of funds or securities. By centralizing these functions, CCIL helps reduce counterparty risk and ensures the smooth functioning of the markets.
Statement 2: It is the trade repository for all Over-the-Counter (OTC) transactions in the Forex market.
CCIL also acts as a trade repository for Over-the-Counter (OTC) transactions in the Forex market. OTC transactions are those that take place directly between two parties without the involvement of an exchange. These transactions are typically customized and not standardized like exchange-traded products. As a trade repository, CCIL collects and maintains records of these transactions, which helps enhance transparency and regulatory oversight in the Forex market.
Explanation:
Both statements 1 and 2 are correct.
CCIL's role as a central counterparty and clearinghouse extends to multiple financial markets, including Money, G-Secs, Foreign Exchange, and Derivatives. Its clearing and settlement services help ensure the timely and efficient completion of transactions in these markets, reducing counterparty risk for market participants.
Additionally, CCIL serves as a trade repository for OTC transactions in the Forex market. This means that it collects and stores information about these transactions, providing regulators with valuable data for monitoring and surveillance purposes. By acting as a trade repository, CCIL contributes to the transparency and stability of the Forex market.
Therefore, both statements are correct, and the correct answer is option C: Both 1 and 2.
Clearing Corporation of India Limited (CCIL) is a central counterparty and clearing house for various financial markets in India. It provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets. CCIL plays a crucial role in ensuring the safety and efficiency of financial transactions.
Statement 1: It provides clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.
CCIL's primary function is to act as a central counterparty for various financial markets. It provides clearing and settlement services for transactions in Money, Government Securities (G-Secs), Foreign Exchange, and Derivative markets. Clearing refers to the process of matching and netting trades, while settlement involves the actual transfer of funds or securities. By centralizing these functions, CCIL helps reduce counterparty risk and ensures the smooth functioning of the markets.
Statement 2: It is the trade repository for all Over-the-Counter (OTC) transactions in the Forex market.
CCIL also acts as a trade repository for Over-the-Counter (OTC) transactions in the Forex market. OTC transactions are those that take place directly between two parties without the involvement of an exchange. These transactions are typically customized and not standardized like exchange-traded products. As a trade repository, CCIL collects and maintains records of these transactions, which helps enhance transparency and regulatory oversight in the Forex market.
Explanation:
Both statements 1 and 2 are correct.
CCIL's role as a central counterparty and clearinghouse extends to multiple financial markets, including Money, G-Secs, Foreign Exchange, and Derivatives. Its clearing and settlement services help ensure the timely and efficient completion of transactions in these markets, reducing counterparty risk for market participants.
Additionally, CCIL serves as a trade repository for OTC transactions in the Forex market. This means that it collects and stores information about these transactions, providing regulators with valuable data for monitoring and surveillance purposes. By acting as a trade repository, CCIL contributes to the transparency and stability of the Forex market.
Therefore, both statements are correct, and the correct answer is option C: Both 1 and 2.
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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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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? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about 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? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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?.
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? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about 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? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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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