The important settlement types are as follows:
- Normal segment (N)
- Trade for trade Surveillance (W)
- Retail Debt Market (D)
- Limited Physical market (O)
- Non cleared TT deals (Z)
- Auction normal (A)
Trades in the settlement type N, W, D and A are settled in dematerialized mode. Trades under settlement type O are settled in physical form. Trades under settlement type Z are settled directly between the members and may be settled either in physical or dematerialized mode.
Details of the two modes of settlement are as under:
NSCCL follows a T+2 rolling settlement cycle. For all trades executed on the T day, NSCCL determines the cumulative obligations of each member on the T+1 day and electronically transfers the data to Clearing Members (CMs). All trades concluded during a particular trading date are settled on a designated settlement day i.e. T+2 day. In case of short deliveries on the T+2 day in the normal segment, NSCCL conducts a buy –in auction on the T+2 day itself and the settlement for the same is completed on the T+3 day, whereas in case of W segment there is a direct close out. For arriving at the settlement day all intervening holidays, which include bank holidays, NSE holidays, Saturdays and Sundays are excluded. The settlement schedule for all the settlement types in the manner explained above is communicated to the market participants vide circular issued during the previous month.
Limited physical Market : To provide an exit route for small investors holding physical shares in securities the Exchange has provided a facility for such trading in physical shares not exceeding 500 shares in the 'Limited Physical Market' (small window).
Salient features of Limited Physical Market
- Delivery of shares in street name and market delivery (clients holding physical shares purchased from the secondary market) is treated as bad delivery. The shares standing in the name of individuals/HUF only would constitute good delivery. The selling/delivering member must necessarily be the introducing member.
- Any delivery of shares which bears the last transfer date on or after the introduction of the security for trading in the LP market is construed as bad delivery.
- Any delivery in excess of 500 shares is marked as short and such deliveries are compulsorily closed-out.
- Shortages, if any, are compulsorily closed-out at 20% over the actual traded price. Non rectification/replacement for bad delivery are closed out at at 10% over the actual trade price. Non rectification/replacement for objection cases are closed out at at 20% above the official closing price in regular Market on the auction day.
- The buyer must compulsorily send the securities for transfer and dematerialisation, latest within 3 months from the date of pay-out.
- Company objections arising out of such trading and
settlement in this market are reported in the same manner as
is currently being done for normal market segment. However
securities would be accepted as valid company objection, only
if the securities are lodged for transfer within 3 months from
the date of pay-out.
Bad Deliveries (in case of physical settlement)
Bad deliveries (deliveries which are prima facie defective) are required to be reported to the clearing house within two days from the receipt of documents. The delivering member is required to rectify these within two days. Un-rectified bad deliveries are assigned to auction on the next day
Company Objections (in case of physical settlement
The CM on whom company objection is lodged has an opportunity to
withdraw the objection if the objection is not valid or the
documents are incomplete (i.e. not as required under guideline
No.100 or 109 of SEBI Good/Bad delivery guidelines), within 7 days
of lodgement against him. If the CM is unable to rectify/replace
defective documents on or before 21 days, NSCCL conducts a buying-in
auction for the non-rectified part of defective document on the next
auction day through the trading system of NSE. All objections, which
are not bought-in, are deemed closed out on the auction day at the
closing price on the auction day plus 20%. This amount is credited
to the receiving member's account on the auction pay-out day.