Settlement Cycle
NSE Clearing carries out clearing and settlement functions as per the settlement cycles provided in the settlement schedule. The clearing function of the clearing corporation is designed to work out a) what members are due to deliver and b) what members are due to receive on the settlement date. Settlement is a two way process which involves transfer of funds and securities on the settlement date. Settlement Cycle NSE Clearing follows a T+1 rolling settlement cycles for debt securities traded on retail platform. For all trades executed on the T day on retail platform, NSE Clearing determines the cumulative obligations of each clearing member.
Pay-in / pay-out shall be conducted on the scheduled pay-in day, in accordance with the settlement calendar periodically issued by the Clearing Corporation in this regard. Members shall maintain settlement accounts at both depositories viz NSDL and CDSL and provide specific pay-in instructions to depositories for effecting pay-in.
Members who are enabled on the Capital Market (CM) segment, the existing pool accounts used in CM segment for the purpose of pay-in and pay-out of securities shall be used in the Debt segment; no separate clearing account is required for the Debt segment.
NSE Clearing provides a facility to Trading Clearing Members to make early pay-in of securities through NSDL and CDSL.
Funds pay-in and pay-out shall be through banks designated as Clearing Banks by the Clearing Corporation. The list of banks currently available for settlement is provided in the circular. The funds obligations shall have two components ie Trade value obligations and Accrued interest obligations.
The trade obligation shall be netted at clearing member level to arrive at the final trade obligation amount payable for a settlement. Accrued interest shall be calculated as follows:
Accrued interest (AI) shall be calculated as follows:
For bonds traded in Clean price adjusted to Rs. 100
For bonds traded in Clean price adjusted to Face Value
A separate report for the accrued interest obligation shall be downloaded daily in the member’s folder on extranet.
Auto Delivery Out
For pay-in through NSDL / CDSL a facility has been provided to members wherein delivery-out instructions will be generated automatically by the Clearing Corporation based on the net delivery obligations of its Clearing Members. These instructions will be released on the T day and the securities in the Clearing Members’ pool accounts will be marked for pay-in.
Further, a facility is provided to the members to directly credit the pay-out to investor’s beneficiary account. Clearing members shall provide a file to Clearing Corporation for effecting pay out to investors' accounts for a particular settlement type and settlement number.
Failure to deliver
Failure of the seller to deliver bonds shall result in buy-in auction for the bonds by Clearing Corporation as per auction schedule declared periodically. The auction amount shall be charged to the short delivering member. Failure to procure bonds in auction or failure of auction seller to deliver bonds in part or full on auction pay-in day, shall result in close out. The financial close out shall take place at highest price on Trade date (which becomes the trade price) with a 1% mark-up on trade price.
Updated on: 24/06/2022
