The transactions executed in the SLBS segment shall be cleared and settled through ICCL as per the guidelines issued by Securities and Exchange Board of India (SEBI) and as per the provisions of Byelaws, Rules and Regulations of ICCL / BSE as well as any other circulars/guidelines that may be issued in respect of the same from time to time.
The members need to participate in the settlement process as per the guidelines and settlement schedule prescribed by ICCL from time to time for settlement of trades entered by them.
Facility is also available for Custodial Participants to settle their trades through Custodian Members of ICCL. For this purpose, the Participants need to give-up the trades to the Custodian Members for confirmation within such time and through such facility as may be provided to from time to time by ICCL.
1.1 Settlement Schedule
The settlement schedule for SLBS segment shall be as under:
1.2 Settlement Process
- The transaction and settlement periods shall be specified by the relevant authority from time to time.
- The pay-in and pay-out of securities and funds pertaining to transactions done in the SLBS segment would be effected in accordance with the settlement schedule issued by ICCL periodically.
- Participants should maintain clear balance of securities in their depository account and funds in their settlement account with the designated clearing bank towards their settlement pay-in obligation at the scheduled pay-in time on the settlement day.
- The pay-out of demat securities shall be credited to the depository account as designated or specified by Participants to ICCL and the funds pay-out shall be credited to the receiving Participant's settlement account maintained with their designated clearing bank.
The settlement of transactions done in the SLBS Segment will be done on a gross basis i.e. there shall be no netting of transactions. ICCL shall generate the obligations of Participants based on the transactions executed by them on the order matching platform. The transactions done under SLBS segment shall be identified based on the market type as intimated by ICCL for the first leg and reverse leg settlements.
Following market types shall be used by Participants for giving instructions to the depositories for pay-in of the securities obligation in SLBS segment:
The transactions done in the SLBS segment across all series inter alia including first leg of the transaction and the early recall/repayment/reverse leg of transactions shall be settled on a T+1 basis.
In case of the reverse leg of the transaction, the settlement obligation shall be generated on the reverse leg settlement date of the respective series.
All Participants are required to return the securities borrowed on completion of period of lending. The securities shall be returned to the lender of the securities by ICCL. In case the borrower fails to return the securities, ICCL shall conduct an auction in respect of same. In exceptional circumstances resulting in non-availability of securities in auction, such transactions would be financially closed-out at appropriate rates.
The settlement calendar, providing the settlement schedule of the various settlement related activities, is drawn by ICCL in advance and circulated among the market Participants. The transactions done in SLBS segment shall be settled as per time lines specified by ICCL. The pay-in and pay-out of funds and securities shall be through the designated clearing bank account and securities settlement account respectively. In case of Participants who are Clearing Members of the ICCL – BSE Equity Cash Segment, the pay-in/pay-out of SLBS transactions shall be done through their clearing bank accounts and demat accounts used by them in the Equity Cash Segment.
For early return and early recall of securities, Participants need to follow the standard procedure as prescribed by ICCL.
A typical settlement cycle for a lending and borrowing transaction shall be as under:
1.3 Auto delivery facility for pay-in of demat securities
|Trade Day (T Day) – First Leg
|Securities Lending & Borrowing session
||09:15 a.m. – 04:40 p.m.
|6A-7A entries by members
||By 4.40 p.m.
|Confirmation of 6A-7A entries by Custodians
||By 05:40 p.m.
|Final obligation download to Participant
|Pay-in of securities/funds – 1st leg
|Pay- out of securities/funds – 1st leg
|Securities return day-1 Day
|Final Obligation for Return Leg (along with the obligations of the First Leg of SLBS)
||By 07.00 p.m.
|Return Leg Day
|Pay-in of securities of return leg
|Pay-out of securities/funds of return leg
|Buy-in auction for failure of borrower to return securities
||12:40 pm (approx.)
|Auction obligation to Participant
|Return Leg +1 day
|Pay-in of securities for auction settlement
|Pay-out of securities/funds for auction settlement
Participants can avail of the auto delivery facility for pay-in of demat securities whereby delivery instructions to the concerned depositories are automatically generated on behalf of the Participants for transfer of demat securities from their pool account/principal account maintained with the depositories. The auto delivery facility is available for First Leg, Return Leg and Auction settlements.
1.4 Settlement pay-in shortages
First Leg and Early Recall Settlement Pay-in shortages
In the event of fund shortages by the borrowers, ICCL shall cancel the SLBS transactions as per its decision and accordingly return the securities to the lenders along with the lending fees. In the event, the lender fails to honor his settlement obligation, the transactions shall be closed-out at higher of the following rates or as may be decided by ICCL from time to time:
Reverse Leg Settlement pay-in shortages
In the event the borrower fails to return the securities, ICCL shall conduct a "Buy-in Auction". In case of non-availability of securities in auction or when the auction offeror fails to deliver securities in part or in full on the auction pay-in day (stock return day + 1), then such transactions shall be closed out at 25% above the closing price of the security in the Equity Cash segment of BSE on the stock return day.
In case of shortages, ICCL may initiate various actions including withholding the securities / funds pay-out due to the Participant or any other action as may be decided by ICCL / BSE from time to time.
1.5 Direct pay-out of demat securities to clients' beneficiary account
1.6 Pay-out of securities in member's pool account with selected depository
ICCL has provided a facility to Participants to receive their demat securities pay-out in their pool account with selected depository. Accordingly, Participants can receive pay-out of demat securities in their specified pool account in either of the depositories, viz, NSDL or CDSL.
1.7 Operation of Clearing Bank Settlement Account
Participants shall irrevocably authorize their designated clearing banks to access their settlement accounts for debiting and crediting their settlement accounts as per the instructions of ICCL, reporting of balances and other information as may be required by ICCL from time to time.
SLBS participants shall maintain clear balance of funds in their settlement accounts with their designated clearing banks towards their funds obligation/s to ICCL.
Participants shall not seek to close or de-activate the settlement accounts without the prior written consent of ICCL.
The clearing banks shall debit/credit the settlement accounts of Participants as per instructions received by them from ICCL from time to time. Any request from the Participants for revoking the authorization furnished by them shall not be considered by the clearing banks. The clearing banks shall not close the settlement accounts or permit deactivation of the same without the prior written consent of ICCL.
1.8 Transactions cleared and settled by Custodians
The Custodians need to maintain the depository accounts with both the depositories i.e., CDSL and NSDL.
1.9 Procedure for change in designated Clearing Bank
*Other than Participants who are clearing members of the ICCL – BSE Equity Cash Segment