A sound risk management system is integral to/pre-requisite for an efficient clearing and settlement system. The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of NSE, was incorporated in August 1995. It was set up to bring and sustain confidence in clearing and settlement of securities; to promote and maintain, short and consistent settlement cycles; to provide counter-party risk guarantee, and to operate a tight risk containment system. NSCCL commenced clearing operations in April 1996.
Risk containment measures include capital adequacy requirements of members, monitoring of member performance and track record, stringent margin requirements, position limits based on capital, online monitoring of member positions and automatic disablement from trading when limits are breached.
To safeguard the interest of the investors, NSE administers an effective market surveillance system to curb excessive volatility, detect and prevent price manipulation and follows a system of price bands. Further, the exchange maintains strict surveillance over market activities in liquid and volatile securities.