CIRCULAR
HO/47/16/14(1)2026-MRD-POD1/I/7115/2026 March 16, 2026
To,
The Managing Directors / Chief Executive Officers,
All Recognised Clearing Corporations having Commodity Derivatives Segment
Sir / Madam,
Sub: Review of Coverage of Settlement Guarantee Fund for Commodity
Derivatives Segment
1. SEBI Master Circular SEBI/HO/MRD/MRD-PoD-1/P/CIR/2023/136 for Commodity
Derivatives Segment dated Aug 04, 2023, inter alia, prescribes norms related to
Core Settlement Guarantee Fund (SGF). The extant provisions pertaining to
coverage of SGF, as provided in paragraph 22 of Annexure O of the said circular
are as follows:
Core Settlement Guarantee Fund (Core SGF) – Annexure O
22) Standardized Stress Testing for Commodity Derivatives
Part C. Coverage
……....
……...for each of the scenarios in Part A, Clearing Corporations shall calculate –
A. Credit exposure due to simultaneous default of at least 2 clearing members (and
their associates) causing highest credit exposure.
B. 50% of the credit exposure due to simultaneous default of all clearing members.”
2. Based on representations received from stakeholders, recommendation of the Risk
Management Review Committee (RMRC) and public comments received, and with
the objective of facilitating Ease of Doing Business, it has been decided to modify
the provisions contained in Part C (with respect to Coverage of SGF) of paragraph
22 (“Standardized Stress Testing for Commodity Derivatives”) of Annexure O of
SEBI Master Circular for Commodity Derivatives Segment dated Aug 04, 2023, as
under:
“Part C. Coverage
For each of the scenarios in Part A, Clearing Corporations shall calculate the credit
exposure due to simultaneous default of at least 3 clearing members (and their
associates) causing highest credit exposure.”
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3. Further, based on the comments received during public consultation, the following
clause has been inserted after paragraph 22 (“Standardized Stress Testing for
Commodity Derivatives”) of Annexure O of SEBI Master Circular for Commodity
Derivatives Segment dated Aug 04, 2023:
“Core Settlement Guarantee Fund (Core SGF) – Annexure O
…………
…………
Other Provisions
23) SEBI, may, after due deliberation, grant exemptions or relaxations from the
strict enforcement of provisions relating to the Settlement Guarantee Fund (SGF)
in the commodity derivatives segment, on a case to case basis. Such exemptions
may be considered after taking into account the prevailing market conditions, the
adequacy of applicable risk management framework and keeping in view the
overall objective of investor protection.”
4. The circular shall come into force with immediate effect.
5. This circular is issued in exercise of the powers conferred under Section 11(1) of
the Securities and Exchange Board of India Act 1992, read with Regulation 51 of
the Securities Contracts (Regulation) (Stock Exchanges and Clearing
Corporations) Regulations, 2018 to protect the interests of investors in securities
and to promote the development of, and to regulate the securities market.
6. The Circular is issued with the approval of the competent authority.
7. This Circular is available on SEBI website www.sebi.gov.in under the category
“Circulars” and “Info for Commodity Derivatives”.
Yours faithfully,
Neetika Rajpal
Deputy General Manager
Market Regulation Department
Email: neetikar@sebi.gov.in
Phone Number: +91-22-26449628
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