- Settlement Procedure - Settlement Period - Delivery of Scrips - Computation of Net Payable or Net - Receivable - Auction (Closing out of Contracts) - Settlement Calendar Schedule and Procedure - Auction Calendar Schedule and Procedure
Settlement Procedure : Under the screen based environment, computerised matching of orders and quotes takes place. At the end of the trading session the member has to download his daily transaction reports etc. from the system. At the end of the Settlement period Delivery Price (usually the closing price at the last day of the Settlement period) will be fixed by the system to enable the members to receive or deliver scrips at uniform rates and netting of trades is done by the system and the following Settlement reports are generated by the system for each member. The member can download these reports on second day of the Settlement end date. - Statement of scripwise net deliveries to be made by the member. - Statement of scripwise net deliveries to be received by the member. - Balance Sheet showing the net receivable or not payable by the Member.
Settlement Period : At present the Exchange follows the following Settlement Schedule : - Rolling Settlement Daily - Odd Lot - Daily
Delivery of Scrips : (Applicable for Rolling Settlement Trades as well as Odd Lot Trades) The Members has to deliver the Securities (otherwise known as Securities pay-in) to the Exchange as per the Statement of scrip-wise net deliveries downloaded by them. - The securities pay in takes place three working days after the trade date. Members have to deliver the shares by 11.00 a.m. on the pay in date through their depository participant. The Execution date for the Depository Participant is usually one day before the securities pay in date. The securities pay in takes place through both Depositories (i.e. NSDL & CDSL) simultaneously. - The securities pay in for trades done through the odd lot segment are done on the third working day after the trade date. Members have to deliver their shares in physical form to the clearing house by 12.00 p.m. on the securities pay in date.
Computation of Net Payable or Net Receivable (appearing in Member’s Balance Sheet) : Net payable or Net Receivable by the members will be computed by the system by taking into account the following :- - Monies payable/receivable by the member on account of receipt/normal delivery of shares. - Monies payable/receivable by member on account of odd lot receipt/delivery of shares. This is done separately from the rolling settlement and through a separate balance sheet. - Turnover charges and Securities Transaction Tax (STT) based on the turnover of member. The rate of turnover charges varies as per slab system of total turnover by member. Based on the above figures net payable or receivable position of the members is computed and reported to the members vide their download of Balance Sheet.
Funds Pay-in :< The Clearing Bank debits on the 3rd day within 11 a.m. from the last date of settlement period, the Settlement Accounts of the members maintained with the Bank with net payable amount appearing in Member’s Balance Sheet. Separate Balance Sheets are generated for Rolling Settlements and Odd Lot Settlements.
Funds Pay-out : The Clearing Bank credits on the 3rd day after 3 p.m. from the last date of Settlement period, the settlement accounts of the members maintained with the Bank with net receivable amount appearing in Members Balance Sheet separately for Rolling Settlement and Odd Lot Settlement.
Securities Pay –Out The securities pay out takes place on the same date as the securities pay in date i.e. in the third working day after the trade date. The securities pay out is done simultaneously through both depositories (NSDL & CDSL) and the process is usually completed by 3 p.m.
Auction (Closing Out of Contracts) : A list of members who have not delivered or short delivered scrips as per their delivery Statement is obtained by the Exchange Authorities. Accordingly a debit advice is sent to the Clearing Bank requesting to debit the Settlement Accounts of the members who have failed to deliver shares to the Exchange and details of shares are sent to the system for Auction of the same. The Exchange fixes a date and time for Auction and all members except the defaulting members can participate in the Auction Session and can offer the scrips under auction with their offering price. The best offer (lowest bid) is accepted. At present Auction is held every day due to rolling settlement. Three rates are relevant :
Auction Rate : This is the weighted average rate of all the selected offers based on the lowest price. Only the selected quantity from the offers is considered for this purpose. This has relation to defaulter debit note. Cut-off Rate : This is the maximum rate and minimum rate at which an offer is accepted. This rate will be closing rate of the scrip on the Auction Day plus a cut-off percentage as decided by the Exchange. At present this percentage is 20%. Closeout Rate : This rate is used to compute the amount to be given to the Buyer in case there is no offer or partial offer in the Auction. This rate is the highest rate on the trade date plus 20% OR the highest rate from the trade date to the auction date, whichever is higher. After the Auction Session the System accepts the lowest offers and if there are no offers for the scrip the same will be closed out at close-out rate. Accordingly the members have to download their Auction Reports and deliver the shares to the Exchange 2 working days after the auction. The Exchange then delivers the same to the Members who are to receive the shares. The process for the securities pay in and pay out for Auction is the same as that of the settlement process. Thereafter the exchange advises the Clearing Bank to debit the accounts of defaulters with the difference of Auction rate and Original Delivery rate and credit the accounts of Auction Sellers. In case of default in Odd Lot trades, no auction takes place for any short or non delivery of shares. Instead, the shares are directly closed out against the defaulting member.