Para 6 - Obligations and responsibilities of approved intermediary - Securities Lending Scheme, 1997

Obligations and responsibilities of approved intermediary. 6. An approved intermediary shall comply with the following obligations and responsibilities :— (1) The approved intermediary shall abide by the scheme and the guidelines issued by the Board from time to time with respect to its activity of securities lending. (2) The approved intermediary shall comply with the requirement of eligibility criteria for the lender and the borrower with the eligibility criteria, if, specified by the Board. (3) The approved intermediary shall specify in the respective agreement the fees payable to the lender and the fee to be charged from the borrower. (4) The approved intermediary shall specify the amount and type of collateral acceptable for the purpose of securities lending as well as the norms for the valuation of securities. It may also specify the mechanism of sharing the income on collateral with the borrower. (5) The approved intermediary at the request of the lender shall issue a receipt acknowledging the deposit of the securities by the lender. The receipt shall include the complete details of securities deposited such as name of security, quantity, face value, certificate number and folio number of the lender along with the date from when the lender has become the registered holder of the security. Similarly, when securities are returned to the lender by the approved intermediary, it shall issue a receipt containing the above details to enable the lender to use the same as a proof of continuity of his holdings. (6) The approved intermediary shall maintain a complete record of the securities deposited by the lender, securities lent to the borrower, the securities received from the borrower and the securities returned to the lender by the approved intermediary. The records of the approved intermediary shall be open for inspection by the Board or any other person duly authorised by the Board for this purpose. (7) The approved intermediary shall maintain and make available to the Board such information, documents, returns and reports as may be specified from time to time. (8) The approved intermediary shall abide by the code of conduct as may be specified by the Board. (9) Nothing in this scheme shall exempt the approved intermediary from discharging any obligations placed on it by any law, regulations and guidelines.