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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Bank Guarantees (BGs) created out of clients funds

25-Apr-2023 | SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/061

SEBI has issued a circular regarding the Bank Guarantees (BGs) created out of clients' funds. Accordingly, the following measures shall be taken:
1. Beginning from 1st May 2023, no new BGs shall be created out of clients' funds by Stock Brokers / Clearing Members.
2. Existing BGs created out of clients' funds shall be wound down by 30th September 2023.
By virtue of this circular, Stock exchanges and Clearing Corporations are directed to submit the data to SEBI on a fortnightly basis starting from 1st June 2023 and to provide a certificate, by its statutory auditor confirming the implementation of this circular by 16th October 2023.

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