> Segregated Nominee Account FAQ
Segregated Nominee Account FAQ
What is Segregated Nominee Account Structure (SNAS)?
The SNAS is a structure which offers ease of market access for foreign investors in IFSC wherein
orders of foreign investors may be routed through an eligible Segregated Nominee Account
Provider (Provider) for trading on the INDIA INX with due adherence to regulatory
Who can register as a Provider to offer SNAS?
The following can register as a Provider offering SNAS services:
- SEBI registered brokers in the International Financial Services Centre (IFSC) at GIFT City
- SEBI registered Foreign Portfolio Investors (FPIs) under Category I and II as per SEBI (FPI)
Regulations, 2019 and as per amendments thereafter
- Trading / Clearing members of international Stock Exchanges / Clearing Corporations that
are regulated by a member of Financial Action Task Force (FATF). Such entities shall be
eligible to register as a Provider subject to successful completion of a due diligence / KYC
verification and validation performed by a SEBI registered intermediary operating in the IFSC
or by a bank which is permitted by RBI to operate in IFSC.
Is there a requirement for registering as a Provider with INDIA INX before offering SNAS
services at INDIA INX?
Yes. Entities need to be registered with INDIA INX as Providers to offer SNAS services.
What is the minimum net worth requirement for registering as a Provider at INDIA INX?
Entities applying to register as a Provider at INDIA INX should have a minimum net worth of
USD 500,000. The applicant should submit a Net-worth Certificate duly certified by a
Chartered Accountant or Certified Public Accountant (or equivalent) or a Company Secretary
in their home jurisdiction or in India along with their application.
Are there any other conditions to be adhered to by the applicant while registering as a
Yes. At the time of registration, the entity is required to give a declaration to furnish
information relating to the end-Clients of Provider, as and when sought by the Exchange,
Clearing Corporation or by any regulatory authority.
Providers and Trading / Clearing Members shall furnish to the Exchange, inter alia, information
relating to KYC and any other details in relation to accounts of their end-Clients, as and when
What is the documentation required for registration as a Provider?
Applicants wanting to register with the Exchange as Providers are required to submit the duly
completed Application Form and supporting documents as per Annexure 1 of INDIA INX
Circular ref no. 20180611-1. The Exchange reserves the right to request for further
information regarding the Applicant for the purpose of KYC / AML related due diligence.
Is there any identifier code issued to the Provider by the Exchange?
Yes. The Exchange, post completion of provider registration process, assigns a unique identifier
called the Provider Code or PCODE to the applicant, post which it can then act as a Segregated
Nominee Account Provider.
Can a Provider register with more than one Trading Member?
Yes. After the PCODE is issued by the Exchange, a Provider who is not a trading member of an
Exchange in the GIFT IFSC, can register with one or more Trading Members for opening
Trading Account(s) after completing the due account opening procedure prescribed by the
Exchange for each of his accounts.
Which type of entities can be on-boarded as the end-Clients by the Provider?
Only foreign clients can be on-boarded by the Providers.
What is the documentation required to be completed for registration of the end-Client
under a Provider?
Providers are required to ensure appropriate due diligence of end-Clients as per global
standards including KYC and AML compliance before on-boarding Clients for offering SNAS
Providers shall ensure adherence to the provisions of the Prevention of Money Laundering
Act, 2002 (PMLA) and the rules thereof, including those relating to capturing the KYC
information for sharing with the Central KYC Registry (CKYCR) to the extent applicable to FPIs
for their end-Clients
Is there any other documentation / requirement to be completed by the Provider while
registering an end-Client?
Yes. There needs to be a clearly defined bilateral agreement in writing between the Provider
and the end-Client. It should contain all relevant commercial terms pertaining to the conduct
of trading, margins, settlements, reporting etc. The Exchange reserves the right to access /
verify / validate the terms of such agreements.
Is the Provider required to disclose details of the end-Client to the Trading Member, Clearing
Member, Exchange, Clearing Corporation, the SEBI or any other authority?
The details of the end-Client shall be disclosed to the Exchange / Clearing Corporation and may
not be disclosed to Trading / Clearing Members. The Provider shall also be required to disclose
such information to SEBI and any relevant authority if required by them.
What are the broad responsibilities of a Provider as prescribed by SEBI?
Providers are required to furnish to SEBI, inter alia, information relating to trades on stock
Exchanges in IFSC originated by them, including KYC details of their end-Clients, as and when
Providers shall ensure that the provisions of Prevention of Money Laundering Act, 2002
(PMLA) and the rules thereof, including those relating to capturing the KYC information for
sharing with the Central KYC Registry (CKYCR) to the extent applicable to FPIs, are adhered to
by ‘Providers’ for their end-Clients.
What is the documentation required for registration of an end-Client?
Providers registered with INDIA INX shall request for a CLCode for each of their end-Clients by
submitting the duly completed Application Form and supporting documents as per Annexure 1
of INDIA ICC Circular ref no. 20180611-2.
Can an end-Client open a segregated nominee account with multiple Providers?
No. An end-Client can open a Segregated Nominee Account (SNA) with only one Provider. This
ensures that the trades of an end-Client are cleared and settled only through one clearing
While on-boarding an end-Client, how does a Provider ensure that the Client has not
opened an SNA with more than one Provider?
Submission of the Legal Entity Identifier (LEI) code is mandatory at the time of applying for onboarding
an end-Client. Basis the LEI the Clearing Corporation, which does the end-Client
registration further to an application by the Provider, can do a de-duplication check to
ascertain that the applicant end-Client has not opened a SNA with any other Provider.
Upon registration of the end-Client with the Clearing Corporation, is there any code
assigned to the end-Client to identify his trades/positions etc.?
Yes. Upon registration of each end-Client by the clearing corporation, each end-Client is
assigned a Unique Client Identifier (CLCODE), which will be unique across all end-Clients of all
Providers in the IFSC. The SNA related end-Client information along with the CLCODE is shared
by the Clearing Corporation with the Exchange.
Is it mandatory to use the CLCODE at the time of order entry by the Provider on behalf of
Yes. The CLCODE is to be mandatorily entered in the client code field at the time of order entry
by the Provider/Trading Member.
Is the end-Client required to execute transactions only through the Provider that he is
The end-Client can execute his transactions through the Provider, in case the Provider is a
Trading Member of the Exchange, or through any other Trading Member with whom the
Provider has a Member-Client relationship.
To whom should the contract note be issued by the trading member?
Trading Members are required to issue the contract note to the Provider giving details of the
CLCODE in the same. This enables the Provider to track end-Client level details.
Can a CLCODE be deactivated or modifications in the end-Client details carried out
subsequently if required?
Yes. A CLCODE can be deactivated and modifications in the end-Client details be carried out,
subject to verification by INDIA ICC, upon providing the required details as per Application
Form and supporting documents as per Annexure 1 of INDIA ICC Circular ref no. 20180611-2
Can a Provider seek services from multiple Clearing Members?
Yes. A Provider can seek services from more than one Clearing Member.
Can an end-Client of a Provider also seek services from multiple Clearing Members?
No. An end-Client is required to clear and settle his transactions through any one Clearing
Member of INDIA ICC with whom the Provider has a Member Client agreement.
Are there any submissions required to be made with INDIA ICC by a Clearing Member upon
tie-up with a Provider for offering their services.
Yes. Each Clearing Member associated with a Provider is required to submit an undertaking as
per Annexure-2 of INDIA ICC Circular ref no. 20180611-2.
What is the process to be followed by the Clearing Member to clear and settle trades for the
CLCODES serviced by them?
The Clearing Members are required to ensure the following for the CLCODEs serviced by them:
- Confirm trades entered for the CLCODEs using the confirmation facility as provided by
Exchange/Clearing Corporation to clearing members from time to time.
- All trades confirmed by Clearing Members shall form part of the obligations of Clearing
Member and he shall be responsible for all obligations arising out of such trades.
- Trades that are not confirmed by the Clearing Member (Unconfirmed trades) shall be
considered as trades pertaining to the Trading Member executing such trades and shall form
a part of the obligations of the Clearing Member who clears and settles trades for such
How is the Margin computation and reporting done in the SNA Structure?
Margin computing and reporting in the SNA structure is done as follows:
- Margins shall be computed at the end-Client level of the Provider
- Margins shall be grossed up at and collected from Provider. The Clearing Member shall be
required to collect all applicable margins from Provider
- Margin reporting shall be done by the Clearing Member at the level of the Provider
- Short / non-reporting of Client margin by clearing members shall be considered as violation
and will attract relevant penal actions.
- Margins will be levied on the Clearing Member of the Trading Member, who has executed
trades using the CLCODE of the end-Client of the Provider till it has not been confirmed by
the Clearing Member mapped to the CLCODE.
Is the end-Client required to pay Margin to the Provider?
Yes. Margin is payable by the end-Client to the Provider.
Is the Provider allowed to fund the margin payable by the end-Client?
Yes. However, the margins may be funded by the Provider subject to there being a clearly
defined bilateral agreement between Provider and the end-Client listing the same.
How are the Position limits applicable in the SNA structure?
The position limits are monitored at end-Client level by the clearing corporation.
What are the applicable position limits for a Provider and for each end-Client?
The position limits applicable as per relevant Exchange/Clearing Corporation circulars will be
applicable for the clients of the Provider.
Would the TM/CM be able to monitor the details at both the Provider and the end-Client
level from the various reports received from the INDIA INX/INDIA ICC?
The Files being currently generated for TMs / CMs would also have the records of end-Clients.
Thus, the respective designated TM and the CM would be able to check the end-Client level
details in these files.
The end-of-session Margin Report for Clearing Members will contain the margin of end-Clients
of each Provider which shall be grossed up at Provider level.
Other end-of-session reports for Clearing Members such as Trade Report, Position file, margin
file etc. shall contain information at the CLCODE level
Which are the relevant circulars issued by SEBI, INDIA INX and INDIA ICC on the SNAS
The relevant SEBI circulars are as below:
- SEBI/HO/MRD/DRMNP/CIR/P/2018/83, dated May 24, 2018
- SEBI/HO/CIR/P/2017/79, dated July 11, 2017
- IMD/HO/FPIC/CIR/P/2017/003, dated Jan 04, 2017
The relevant INDIA INX circulars are as below:
- Circular ref. no. 20200512-01, dated May 12, 2020
- Circular ref. no. 20180611-01, dated Jun 11, 2018
- Circular ref. no. 20180524-02, dated May 24, 2018
The relevant INDIA ICC circulars are as below:
- Circular ref. no. 20180611-02, dated June 11, 2018
- Circular ref. no. 20180524-01, dated May 24, 2018