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| SETTLEMENT OF SECURITIES IN DEMAT FORM |
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| What is the procedure for delivery of securities in demat form in case of sale of securities? |
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The procedure for selling dematerialised securities through any stock exchange is similar to the procedure for selling physical shares. However, the procedure for delivery of securities is much simpler when compared to the delivery of securities in physical segment. In case of sale of demat security, immediately on receipt of intimation of execution of trade from broker, the seller should issue debit instructions to the DP with whom he maintains his demat account, for delivery of security either directly to the Clearing Corporation/Clearing House or to the broker's clearing account, as advised by his broker. |
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| What is the procedure for receipt of securities in demat form in case of purchase of securities? |
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A purchaser of securities can give one-time standing instruction to his DP for receiving securities in his account. This standing instruction can be given at the time of opening of account or later. Alternatively, a BO may choose to issue separate receipt instruction to his DP every time he makes any purchase of securities. |
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| What is an On Market and Off Market transaction? |
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| a) Any transaction for sale and purchase of securities through a broker on the stock exchange to be settled through Clearing Corporation / Clearing House is generally termed as On Market transaction. | | b) Off Market transaction is one which is settled directly between two BOs with or without using the broker and where no Clearing Corporation / Clearing House is involved. |
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| What is an Inter Depository transfer? |
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Any transfer of securities between two BOs not having demat accounts with the same depository is termed as an "Inter Depository" transfer. |
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| Can inter depository instruction be executed through the same instruction slips as used for on market and off market transactions? |
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Yes. In CDSL, inter depository transfers can be executed through the same instruction slips used for on market and off market transactions. |
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| Can securities be bought and sold through Depository Participant? |
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No. Securities can be bought and sold only through a stockbroker. DP facilitates delivery of securities against a sell transaction or receipt of securities for a buy transaction. |
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| What are the transaction charges in respect of transfer of demat securities? |
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Transaction charges for each debit in a BO account is levied by CDSL and collected by DPs. DPs after adding their mark up, if any, fix a composite charge which is intimated by them to their clients. |
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| How the Settlement Number is indicated? |
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Settlement number has 7 digits, the first 4 digits represent the year and the remaining 3 digits represent the settlement number of the exchange on which the transaction has been executed. |
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| What are the different Market Types for settlements through CDSL? |
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| Market Type Description | Character Codes | | Rolling Market (BSE) | RM | | Normal Rolling (NSE) | NR | | Auction Rolling (BSE) | AR | | Normal Auction (NSE) | NA | | Company Objection | CO | | Company Objection Auction | CO | | Trade-to-Trade | TT |
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| What is client level pay-in? What are the benefits of client level pay-in? |
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Facility to deliver securities to Clearing Corporation/Clearing House directly from the demat account of investors is termed as client level pay-in. Benefits of the client level pay-in are:- |
| a) In the present market environment of T+2 pay-in settlement cycle, faster settlement of securities can be facilitated through client level pay-in. | | b) Client level pay-in avoids issuance of multiple instructions i.e. first from client to CM and then from CM to Clearing Corporation/Clearing House. Last minute pay-in is possible through the client level pay-in. | | c) Client level pay-in avoids counter party risk associated with the delivery of securities through an intermediary. | | d) Last minute credits received in a BO account before pay-in time can be used for pay-in. | | e) Part pay-in of securities is possible, thereby, reducing losses due to auction (if any). |
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| Does CDSL provide for the client level payin? |
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Yes. CDSL provides the facility of client level 'normal' and 'early' payin for, both, BSE and NSE settlements. |
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| What precautions need to be observed with respect to Instruction Slips? |
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BOs should take the following precautions with respect to instruction slips:- |
| a) Ensure that the DP issues Debit Instruction Slip (DIS) book. | | b) Ensure that instruction slip numbers are pre-printed on each DIS. | | c) Ensure that the demat account number is prestamped. | | d) If only one entry is made in the DIS, strike out remaining space to prevent misuse. | | e) All details like target account ID, quantity, ISIN, etc. to be furnished in the DIS should be filled in by BO himself. | | f) Use separate DIS for confirming On Market / Off Market / Inter depository obligations / transfers and also for Delivery and Receipt Instructions. | | g) In case of a Joint Account, all the account holders must sign the DIS | | h) Submit the DIS in duplicate and obtain the DP's acknowledgment / receipt stamp on the copy of the DIS and retain the same in safe custody. | | i) Keep the DIS book in proper custody under lock and key when not in use. In case of any loss / misplacement of DIS, the same should be intimated to the DP immediately. | | j) Should never sign and keep a blank DIS. | | k) All the holders must confirm any alteration, correction or cancellation made on the DIS with their signatures. |
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