A Legal Look at the Function, Nature and Structure of the Settlement Guarantee Fund in the Stock and Securities Market

• Main Authors: Sayyed Ali Hosini, Mohamad Sadegh Zoghi, Sayyed Morteza Shahidi
• Format: Article
• Language: fas
• Published: Imam Sadiq University 2019-10-01
• Series: تحقیقات مالی اسلامی (پیوسته)
• Subjects: guarantee fund; clearing house; default; settling transactions; securities; depository; exchange. jel classification: d51; d53; g23; p48; h11
• Online Access: http://ifr.journals.isu.ac.ir/article_2406_485b236b016a78bec546b57fb5c275e6.pdf
• ISSN: 2251-8290; 2588-6584

The clearing and settlement operations of securities transactions are subject to numerous risks. Some of these risks can be controlled by tools such as the "Margin" (initial guarantee) by the clearing house, but after all these tools have been implemented, there is the risk of default by one of the parties at the stage of settling and fulfilling obligations. In such a situation, due to the necessity of settling all transactions in due time (the third day after the transaction), the market faces numerous risks. The "Settlement Guarantee Fund" was established in 2012 by the "Central Securities and Depository" Corporation so that the clearing house as the central counterparty could deal with the management of clearing risks. The present research, having as its purpose to analyze this new institution, has been compiled by descriptive- analytical method in three sections. In the first section, three functions of the SGF, namely the transaction risk control, the ability of the central counterparty mechanism or CCP in clearing house, and security promotion of the capital market are examined. In analyzing the juridical-legal nature of the SGF, we ultimately selected the "Mortgage in condition of mandate" after reviewing various named contracts. In the third section, the structure of the SGF will be outlined on the basis of its newest formulated guidelines.