Settlement procedures (BSE & NSE)
Settlement Procedures
(BSE & NSE)
For Settlement of securities for BSE trades a CM has to open following accounts with any DP of CDSL.
- CM Principal Account (Pay-in Account)
- CM Unified Settlement Account (Pay-out Account)
Pay-in:
Procedure for BSE Pay-in is as follows:
- Arrange for transfer of securities from Client Account to CM Principal Account before the scheduled pay-in time.
- Alternatively Pay-in can be done from client account directly through On Market Instruction.
- If a CM has opted for Auto Pay-in the securities available in the CM Principal A/C would be considered for Pay-in. A member need not give any inter settlement/delivery out instruction.
- If a CM has not opted for Auto Pay-in the securities have to be transferred from CM Principal A/c through On Market Instruction.
- At the scheduled pay-in time the securities transferred through Auto Pay-in/On Market Instructions from CM Principal A/c/ On market Instruction from Client A/c would be earmarked for Pay-in.
Auto Pay-in:
In order to avail Auto Pay-in facility a CM has to provide instruction to the CH in format specified by the CH. Members who have opted for Auto Pay-in need not give On Market Instructions from CM Principal A/c for any settlement or from CM clearing A/c for NSE.
Early Pay-in:
The procedure for early pay-in is as follows:
- The BO and/or the CM who wishes to do early pay-in, shall fill in the Early Pay-in Instruction slip and deliver the same to his DP.
- The securities for early pay-in can be delivered from the CM Principal a/c and the BO a/c only.The securities for early pay-in can be delivered from the CM Principal a/c and the BO a/c only.
- It is mandatory for CMs/BOs to mention settlement number in the Early Pay-in Instruction Slip. Thus through Early Pay-in Facility CMs can perform Settlement wise pay-in.
- The BO or the CM can do early pay-in from the day of trading upto one day prior to the pay-in day.
- As of now, the early-in facility is permitted for A/c Period/weekly and Rolling type of settlements only. In case the early pay-in facility is used for other type of settlements, the benefits of early pay-in will not be made available to the CM's. However the securities delivered to the designated early pay-in a/c will be picked up by the CH/CC for pay-in.
- The securities already delivered as early pay-in would be first utilised for satisfying the net obligations of the CM and thereafter the pay-in of securities would be carried out.For example :
Illustration - Settlement at BSE
Eg 1:
- a) Net obligation of CM is 3000 shares.
- b) Early pay-in is done for 1000 shares.
- In this case, 1000 shares will be first utilised from the early pay-in a/c and the balance pay-in will have to be done as per the normal procedure based on the confirmation given by the BO's/CM's. The excess shares will returned to the CM USA a/c at the time of pay-out.
Eg 2:
- a) Net obligation of CM is 3000 shares.
- b) Early pay-in is done for 4000 shares.
- In this case, all 4000 shares will be utilised from the early pay-in a/c alongwith the shares for which BO confirmation was given. The excess shares will returned to the CM USA a/c at the time of pay-out.
Settlement of trades at NSE and other exchanges
For Settlement of securities for NSE/CSE/ASE & DSE trades a CM has to open following accounts per exchange with any DP of CDSL
- 1. CM Clearing Account
The CM Clearing A/c would be used for pay-in and pay-out purpose.
Pay-in:
Pay-in procedure for NSE/CSE/ASE & DSE is as follows:
- Arrange for transfer of securities to CM Clearing Account before the scheduled pay-in time.
- At the pay-in time the securities available in the CM Clearing Account would be considered for pay-in.
- There is no need to provide any instruction from CM Clearing Account as the securities would be auto picked up for pay-in.
- For auto pay in, CM clearing member account has to be mentioned for NSE.
Early Pay-in:
The procedure for early pay-in is as follows:
- The BO and/or the CM who wishes to do early pay-in, shall fill in the Early Pay-in Instruction slip and deliver the same to his DP.
- The securities for early pay-in can be delivered from the CM Clearing a/c and the BO a/c only.
- It is mandatory for CMs/BOs to mention settlement number in the Early Pay-in Instruction Slip. Thus through Early Pay-in Facility CMs can perform Settlement wise pay-in.
- The BO or the CM can do early pay-in from the day of trading upto one day prior to the pay-in day.
- As of now, the early-in facility is permitted for A/c Period/weekly and Rolling type of settlements only. In case the early pay-in facility is used for other type of settlements, the benefits of early pay-in will not be made available to the CM's. However the securities delivered to the designated early pay-in a/c will be picked up by the CH/CC for pay-in.
- The securities already delivered as early pay-in would be first utilised for satisfying the net obligations of the CM and thereafter the pay-in of securities would be carried out. For example :
Illustration - Settlement at NSE
Eg 1:
- a) Net obligation of CM is 3000 shares.
- b) Early pay-in is done for 1000 shares.
- CM Clg Member a/c has 3000 sharesCM Clg Member a/c has 3000 shares
- In this case, 1000 shares will be first utilised from the early pay-in a/c and only 2000 shares will be picked up from CM Clearing a/c.
Eg 2:
- a) Net obligation of CM is 3000 shares.
- b) Early pay-in is done for 4000 shares.
- In this case 4000 shares will be first utilised from the early pay-in a/c and the excess 1000 shares will be returned to the CM in pay-out. The balance in the CM Clearing a/c, if any, will not be utilised for pay-in.
Pay-out
The Pay-out of a settlement would be received in the CM Clearing A/c on the day of pay-out. Members also have an option to obtain the pay-out of securities directly in the client account. As per the provisions of SEBI Circular Number SMDRP/Policy/Cir-05/2001 dated 1st February,2001 pay-out can be obtained in the client account by using the Pay-out Break up facility provided by the Exchange. If a CM has not provided any pay-out breakup, all such securities would be transferred to CM Clearing Account.