NSE CLEARING provides a facility for settlement of deals in corporate bonds.
Settlement of Corporate Bond Transactions
- All trades in corporate bonds available in demat form which are reported on any of the following platforms provided viz., FIMMDA, NSE-WDM and NSE web site shall be eligible for settlement through NSE CLEARING.
- In order to facilitate settlement of corporate bond trades through NSE CLEARING, both buy and sell participants shall be required to explicitly express their intention to settle the corporate bond trades through NSE CLEARING.
- The trades will be settled at participant level on DVP I basis i.e., on gross basis for securities and funds. The settlements shall be carried out through the bank and DP accounts specified by the participants.
- On the settlement date, during the pay-in, participants shall be required to transfer the securities to the Depository account specified by NSE CLEARING and transfer the funds to the bank account specified by NSE CLEARING within the stipulated cut-off time.
- On successful completion of pay-in of both securities and funds, the securities / funds shall be transferred by NSE CLEARING to the depository / bank account of the counter-party.
- The participants desirous of clearing and settling the trade through a custodian may do so by specifying the custodian details.
- Custodian may be specified either for a participant wherein all the trades for such participant shall be eligible for settlement by custodian or for a trade wherein only that trade shall be eligible for settlement by custodian.
- In order to facilitate settlement of trades identified for settlement by custodian, through NSE CLEARING, the custodian shall be required to explicitly express its intention to settle such trades through NSE CLEARING. The settlement of trade in such case shall take place through the custodian's bank and DP account as specified by the custodian.
Failure of Settlement Obligation of Corporate Bond Transactions
If either of the participants / custodians fails to honor their pay-in obligation, either fully or partially, by stipulated time then the transaction shall be cancelled and shall not be considered for settlement. Further the securities / funds received towards the pay-in obligation shall be returned back to the respective participants / custodians.