The Securities and Exchange Board of India has renewed its recognition of AMC Repo Clearing Ltd. to operate as a clearing corporation for one year till Jan. 16, 2026.
The markets regulator has authorised the company to clear and settle transactions related to repo and reverse repo agreements in debt securities for one year starting Jan. 17, 2025, according to SEBI’s notification on its website on Friday.
Under the rules, AMC Repo Clearing will not undertake any activity except that of clearing and settling of transactions in repo and reverse repo in the debt securities that are dealt with or traded on a recognised stock exchange.
Earlier, the SEBI had granted recognition to such clearing corporations in January 2023.
In October 2020, SEBI had allowed setting up of a limited purpose clearing corporation for clearing and settlement of repo transactions in debt securities.
Subsequently, in February 2021, the regulator issued guidelines wherein asset management companies were required to contribute Rs 150 crore as share capital for setting up of an LPCC by mutual funds.
SEBI’s move to allow the mutual fund industry to set up the clearing entity was to help them manage redemption pressures, like sudden withdrawal of money by investors, as well as to facilitate smoother settlement of transactions, especially in the corporate bond market.
(With Inputs From PTI)
