The Securities and Exchange Board of India (SEBI) plans to expand clearing corporation interoperability to include tender offers, share buybacks and offers for sale (OFS) by the end of November 2026.
The proposed move is expected to simplify clearing operations, reduce compliance expenses and improve capital utilisation for stockbrokers.
According to a report by Moneycontrol, SEBI Chairperson Tuhin Kanta Pandey recently outlined the implementation timeline at an event organised by the BSE Brokers Forum (BBF).
He said the regulator was working to address gaps in the existing framework while maintaining settlement safety.
Aims to reduce brokers' clearing costs
Although most exchange-traded products already fall under clearing interoperability, certain transactions remain excluded.
Consequently, brokers handling these activities may need separate arrangements with BSE Clearing Corporation and NSE Clearing, depending on the exchange involved.
Maintaining multiple clearing relationships increases administrative expenses and regulatory obligations.
Brokers must also provide margins, deposits and prescribed net worth while paying annual clearing fees for individual segments.
These requirements can tie up capital that could otherwise support trading operations.
The Brokers' Industry Standards Forum (ISF) had raised the issue with SEBI, highlighting the financial and operational burden of parallel arrangements.
Extending interoperability to the remaining transaction categories could help brokers consolidate clearing obligations and use collateral more efficiently.
As per the report, market participants have welcomed the proposal, citing potential reductions in infrastructure costs and operational complexity.
Clearing interoperability expansion targeted for November
Introduced in June 2019, clearing corporation interoperability allows eligible trades executed across different stock exchanges to be cleared through an interconnected framework.
It enables cross-exchange netting of qualifying positions and reduces the need to maintain separate collateral pools.
However, the exclusion of tender offers, buybacks and OFS has limited these benefits for certain market activities.
SEBI now intends to close this gap by bringing these transactions within the existing system.
The regulator is targeting implementation by November-end, although specific operational arrangements will depend on the final framework.
If implemented as proposed, the expansion could create more uniform clearing procedures across exchanges while reducing unnecessary capital commitments.
SEBI has emphasised that improved efficiency must not compromise the safety of trade settlement.
