CLEARING MECHANISM
The clearing houses attached to stock exchanges functioned only as conduits to delivery of securities and money.
The default risk by the counter party in the transaction continued to remain.
The NSE was the first stock exchange to set up a clearing corporation.
The National Securities Clearing Corporation (NSCC) assumes the counterparty risk in all trading deals made on the exchange.
NSCC acts as the counterparty for all the trades and the default risk in the deal is borne by it.
NSE has created a special Trade Guarantee Fund for this purpose and loss due to defaults will be met by drawing from its corpus.
The clearing houses attached to stock exchanges functioned only as conduits to delivery of securities and money.
The default risk by the counter party in the transaction continued to remain.
The NSE was the first stock exchange to set up a clearing corporation.
The National Securities Clearing Corporation (NSCC) assumes the counterparty risk in all trading deals made on the exchange.
NSCC acts as the counterparty for all the trades and the default risk in the deal is borne by it.
NSE has created a special Trade Guarantee Fund for this purpose and loss due to defaults will be met by drawing from its corpus.