Sebi rejigs advisory panels on clearing corporations, risk management

Market regulator Securities and Exchange Board of India (Sebi) has reconstituted two of its key advisory committees, which are mandated to give suggestions on regulation for clearing corporations and risk management review system.

The six-member panel on clearing corporations is headed by ICICI Bank chairman K V Kamath, while the ten-member committee on risk management review is chaired by IIM Ahmedabad professor J R Varma.

The two committees have been revamped after departure of Sebi executive director S Raman, who was also a member of both the panels.

Sebi executive director S V Murali Dhar Rao is now a member on both the committees.

The changes in clearing corporations comes at a time when payment crises surfaced at National Spot Exchange Ltd (NSEL) and a technical glitch was seen at the US bourse Nasdaq.

The clearing corporations committee is assigned to see the viability of introducing a single clearing corporation (CC) or interoperability between different CCs.

It is mandated to examine and review the existing regulation of transfer of profits every year by the bourses to CCs and is also given the task of defining 'the liquid assets' of CCs for the purpose of calculation of net worth among others.

The panel on risk management system would review the risk management framework for the cash and derivatives segment and recommend changes if required.

Among other functions of the panel included outlining the investor protection measure in the stock exchanges, consider and suggest measures in reducing transmission of risk from other segments.

Other members of the clearing corporation panel are G Padmanabhan, RBI executive director (Department of Information and Technology and Department of Payment and Settlements and Foreign Exchange), IIT Mumbai professor Deepak Pathak, IIM Bangalore professor V Ravi Anshuman and B Sambamurty, director at Institute for Development and Research in Banking Technology (IDRBT).

Among other members of risk management review committee included MCX-SX Clearing Corporations vice president Balu R Nair, National Securities Clearing Corporation senior vice president R Sundararaman and BSE chief regulatory officer Nehal Vora.