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    Contributory Guarantee Fund (CGF)

      CSE Clear > Contributory Guarantee Fund (CGF)

    In the event of a default by a Clearing Member, the Contributory Guarantee Fund (CGF) serves as a financial safeguard, if the defaulting CM’s collateral is insufficient to cover shortfalls.

    This fund will consist of:

    1. Cash contributed by the Clearing House.
    2. Cash and bank guarantees contributed by Clearing Members.
    3. All accumulations and gains related to the Contributory Guarantee Fund, including accrued interest and other income generated from the contributions mentioned above.

    The Clearing House will maintain legal and beneficial ownership of all cash contributed to the Contributory Guarantee Fund.

    The CGF contributions will be reviewed quarterly, and Clearing Members will be required to contribute based on CSE Clear’s assessment.

    • Fixed and Variable Contributions

    A one-time payment of Rs. 1,000,000 by each Clearing Member, payable only in cash. Interest accruing to Fixed Contribution in cash shall be appropriated by the CSE Clear to the Contributory Guarantee Fund (CGF) and does not pass to the Clearing Member.

    Contribution in excess of the Fixed Contribution shall be termed as Variable Contribution.

    • Variable Contribution can be made in LKR cash and approved collateral (bank guarantees).
    • The Variable Contribution of each Clearing Member shall be computed based on the trading    turnover of each Clearing Member as against the aggregate market turnover for the preceding quarter.
    • Interest accruing to LKR cash contributions in variable Contribution will be returned to Clearing    Members by the CSE Clear.
    • If there is a withdrawal/termination of a Clearing Member, the CSE Clear may return its contribution made in cash or release any collateral lodged by the Clearing Member, upon all dues/liabilities settled by the Clearing Member in full.
    • If a Clearing Member fails to meet the requirements for contributions to the Contributory Guarantee Fund (CGF), the Clearing House will:
    1. Impose fines for each instance of non-compliance.
    2. Initiate disciplinary proceedings if there are more than three occurrences within a 12-month period.