Non-cleared (Trade for Trade) Deals
NSE CLEARING does not undertake clearing and settlement of deals executed on the Trade for Trade sub-segment as well as negotiated deals executed on any sub-segment of the Exchange. Primary responsibility of settling these deals rests directly with the members and the Exchange only monitors the settlement. The parties are required to report settlement of these deals to the Exchange.
Settlement Obligations for TT Market deals have to be settled within 2 working days (T + 2 day basis) from the date of deal directly between the buying and selling clearing members. The exchange of securities and funds has to take place directly between the buying and selling clearing members The selling clearing member is required to render delivery of securities to the office of the buying clearing member in exchange for funds which may be paid by means of Cheque/Demand Draft/Pay-order by the buying clearing member or by such other means which enable the selling clearing member to realise the funds on the same day as the exchange of securities. Settlement details must be reported by Custodian and/or TM clearing members to the Clearing Corporation in the formats prescribed as Form No: NSEF 07A or 07B respectively within 24 hours of the settlement. Members may refer Circular Download ref no: nse/cmpt/11274, item 24 for the forms.
The delivery of securities in settlement of TT Market deals can be the following units
- in marketable lot, or
- in certificates of denomination of 1000 shares, or
- certificate of the denomination of the traded quantity.
The choice of deciding on the denomination of certificates will rest with the delivering clearing member.
TM Clearing members will receive a report of Settlement Obligations for TT Market deals at the end of the day.
Custodian Clearing Members will receive a report of Settlement Obligations for the TT Market deals executed on behalf of their clients at the end of the day.
Custodian Clearing Members are required to confirm TT Market deals executed on behalf of their clients for settlement purpose within the settlement periods specified by the relevant authority from time to time. In case the custodian clearing member does not confirm the deal, the responsibility to settle the deal will shift to the TM Clearing Member who executed the deal.
In case a member expresses inability to settle the trade either by paying funds or delivering securities, then the trade will be deemed closed-out at the highest price prevailing in the NSE in Normal Market from the trading day till the date of settlement or 20 % above the official closing price in the Normal Market on the date of settlement of such trade, whichever is higher.
In case of non rectification/replacement of any bad delivery, the trade will be deemed closed-out at the highest price prevailing in the NSE in Normal Market from the trading day till the date of settlement or 20% above the official closing price in Normal Market on the date of settlement of such trade, whichever is higher.
The defaulting member shall pay the difference between the settlement prices and close out price within 5 working days from the date of settlement to the counterparty failing which the amount of difference shall be debited by Clearing Corporation to the account of the defaulting member. On recovery of the said amount, the credit thereof shall be given to the receiving member.
If the defaulting party does not pay the difference, the aggrieved party can refer the matter to the clearing corporation for suitable actions.
The defaulting party shall further pay a penal charge of 0.5 % of the traded value to Clearing Corporation. The penal charges shall be debited to the clearing accounts of the members and will be transferred to the Settlement Guarantee Fund.
In case a deal executed in TT segment is cancelled by a Clearing Member, a penal charge of Rs.1000 for each cancellation of a trade shall be levied. If a clearing member is buying as well as selling member, Rs.2000 shall be collected as charge for cancellation of Trade. The cancellation charges shall be levied without prejudice to any disciplinary action including referring the matter to Disciplinary Action Committee.
Where a member fails to report settlement of the TT trades within 24 hours of the settlement date, a processing fee of Rs. 500 /- per trade per day subject to maximum of 2.50 times the value of the trade for each side with a ceiling Rs. 5000/- shall be levied for late reporting of a trade on such a member even though the trades are settled by the settlement date.
Members shall seek prior approval of the Clearing Corporation to grant extension of the settlement date, if due to unavoidable circumstances they would be not able to settle the trades by the settlement date. The relevant authority may, if satisfied that such circumstances exist in its absolute discretion, approve any such extension of settlement date.
Where a member fails to obtain prior approval from Clearing Corporation for extension of the settlement date of the TT trades, a processing fee of Rs. 500 /- per trade per day subject to maximum of 2.50 times the value of the trade for each side with a ceiling Rs. 10000/- shall be levied for late settlement of a trade.
Where a member establishes to the satisfaction of the relevant authority that the failure to settle is on account of non-payment of funds or non-delivery of securities by the counter-party member and that he has fulfilled his part of obligation in full and in time, the relevant authority in such cases may not impose the penal charges on such a member.