| What is a Rolling Settlement? |
|
In a Rolling Settlement trades executed during
the day are settled based on the net obligations for the day.
In NSE, the trades pertaining to the rolling settlement are settled on a T+2
day basis where T stands for the trade day. Hence trades executed on a Monday
are typically settled on the following Wednesday (considering 2 working days
from the trade day).
The funds and securities pay-in and pay-out are carried out on T+2 day.
|
|
 |
|
| What is Pay-in? |
|
|
|
| What is Pay-out? |
|
-
In Pay-out of securities, shares are received from the NSCCL
and the same is transferred to IL&FS INVESTSMART pool account. All the shares are then transferred to the client
beneficiary account.
-
In Pay-out of funds , funds are transferred from the
NSCCL to IL&FS INVESTSMART Bank a/c . All the funds are than transferred to the
client bank a/c.
|
| Pay-out(securities) Pay-out(securities) |
|
| Client
Beneficiary/bank a/c. |
|
<< |
|
<< |
|
|
|
| Pay-out(funds) Pay-out(funds) |
|
| What is a settlement cycle? |
|
A settlement cycle is a period
from the day the shares are bought/sold till the obligation of each client is
settled by the exchange on T+ 2 day, where T indicates the trading/transaction
day.
|
|
| What is a settlement number? |
|
Settlement number is a specified
number given by the exchange for the trades settled on a particular day.
|
|
| For example, Settlement no: 2004077 on
April 28, 2004 |
|
| What is a settlement date? |
|
| Settlement date is a specified date on which
pay-in and pay-out of securities/funds are settled. |
|
| What is a rolling settlement cycle? |
|
In a rolling settlement, each
trading day is considered as a trading period and trades executed during the
day are settled based on the net obligations for the day. At NSE and BSE,
trades in rolling settlement are settled on a T+2 basis, i.e. on the second
working day. Typically trades taking place on Monday are settled on Wednesday,
Tuesday's trades are settled on Thursday and so on. For arriving at the
settlement day all intervening holidays, which include bank holidays, NSE/BSE
holidays, Saturdays and Sundays are excluded.
|
|
| What is an auction?
|
|
The exchange can initiate an
auction in case the selling trading member is unable to deliver the shares, for
various reasons such as short delivery, bad delivery and objections. The
exchange purchases the requisite quantity in the auction market and gives the
delivery to the buying trading member. This process takes three to five days to
complete and thus in case if you have a purchase position and the shares are
not delivered by the opposite selling member, then there could be a delay in
receiving the shares, until such time that the exchange completes the auction
process.
|
|
| Note: |
Internal shortage: in
internal shortage the broker repurchases securities from the exchange at market
rate and the shares are transferred to the client's account. This cycle is
completed in T+3 days.
|
|
Exchange shortage: here
there is a shortage in the exchange for which the client gets credit and the
account is settled by the exchange. This cycle is completed in T+ 5 days.
|
|
| What happens if no one offers shares in the
auction market? |
|
In case there is no offer for
shares in the auction market, then as per the rules of the NSE the sell trade
is squared off at the highest price for the scrip in the relevant settlement or
at 20% above the last available trading price on the NSE, whichever is higher.
|
|
| The settlement process |
|
The Settlement department carries
out the pay-in and pay-out confirmation process of securities on a settlement
basis. The purpose of this process is to transfer the securities to and fro,
from the Client Beneficiary account to NSE/BSE via the broker's (IL&FS
INVESTSMART) pool account.
|
Trading Platforms
Research