Brief Overview:
The framework on replenishment of default funds vis-à-vis a non-defaulting member is proposed to be calculated based on a rolling window of 30-days, but the same will be limited to 5x of the contribution determined at the time of default.
The proposal is open for comments till 23rd January 2026.
Technical Details:
Key Highlights
1) Capping of liability of the non-defaulting member – default fund – independent of resignation.
2) On default, a non-defaulting member’s contribution to be limited to the lower of:
(a) 5x original contribution (at start of 30-day period) minus what’s already used; and
(b) 5x revised contribution (if resized during the period) minus what’s already used after the revision.
3) Multiple revisions: Calculate for each revision; lowest amount applies.
4) Rolling 30-day window: Ensures predictability and clear liability limits.
5) Max liability certainty: Never exceeds 5x contribution – start default fund.
Takeaways:
The change brings absolute certainty on maximum exposure, eliminates dependency on resignation, and enables better liquidity planning and risk predictability for members.
For further details, please see:
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