Description

ICCL details the clearing, settlement, and risk management framework for newly introduced Futures & Options contracts on the BSE Focused IT Index, covering daily/final settlement timelines and SPAN-based margin methodology.

Summary

ICCL (Indian Clearing Corporation Limited) has issued the clearing & settlement procedures and risk management norms for Futures & Options contracts on the BSE Focused IT Index, pursuant to BSE Circular No. 20260415-34 dated April 15, 2026. The framework covers daily mark-to-market settlements, final settlements, and SPAN-based initial margin requirements.

Key Points

  • Daily mark-to-market (MTM) settlement and premium settlement are on a T+1 cash basis per ICCL-specified timelines
  • Final settlement is on T+1 from the last trading day of the contract
  • Daily settlement price for futures is based on the last half-hour volume weighted average price (VWAP)
  • Final settlement price is the closing price of the BSE Focused IT Index on the last trading day
  • Initial margins use SPAN methodology targeting at least 99% single-tailed confidence interval over a two-day horizon
  • Client-wise margins are grossed across clients at the Trading/Clearing Member level
  • All existing F&O Segment rules and regulations continue to apply to these new contracts

Regulatory Changes

New derivative contracts — Futures and Options — on the BSE Focused IT Index are being operationalized under the clearing and settlement framework outlined in this notice. The applicable norms are consistent with existing equity derivatives segment rules, with no separate carve-outs beyond the settlement schedule issued periodically by ICCL.

Compliance Requirements

  • Clearing Members must maintain clear fund balances in their settlement accounts with designated Clearing Banks by the scheduled pay-in time on settlement days
  • Members must adhere to SPAN-based initial margin requirements computed on a worst-case portfolio loss basis
  • Members should refer to the consolidated master circular for the Equity Derivatives Segment available on the ICCL website (Downloads section) for full procedural details
  • For queries, members may contact their Relationship Managers or ICCL at: Risk Management: +91-22-22725186/5059/8699; Derivatives Operations: +91-22-22725776/5109/8682; ICCL Helpdesk: +91-22-69158590/45720490/45720690

Important Dates

  • April 15, 2026: Original BSE Circular No. 20260415-34 introducing F&O contracts on BSE Focused IT Index
  • May 8, 2026: This notice date — clearing, settlement, and risk management norms operationalized
  • Settlement schedules for pay-in/pay-out will be issued by ICCL periodically

Impact Assessment

This circular has high operational impact on all market participants active in the equity derivatives segment. Trading and Clearing Members must ensure their risk and back-office systems are configured to handle the new BSE Focused IT Index contracts under SPAN margin computation. The T+1 settlement cycle and VWAP-based daily settlement pricing are consistent with existing F&O norms, minimizing system change burden. The introduction of index derivatives on a focused IT sector index provides new hedging and speculative instruments for market participants with IT sector exposure.

Impact Justification

Introduces new derivative contracts on BSE Focused IT Index with binding clearing, settlement, and margin norms affecting all market participants trading in equity derivatives segment.