Risk Management and Clearing & Settlement process in respect of CFS facility is as follows:
The CFS facility consists of 2 legs of trades viz. one equity segment leg and 2nd leg is the stock futures segment leg. Accordingly, for margin purpose, the existing norms as applicable to such trades in the respective trading segments viz. Equity Cash Segment and Equity Derivatives Segment are applicable.
Early pay-in Facility for Equity Derivatives Segment:
The process for the facility of early pay-in of shares in CFS is as follows:-
Settlement Process for Cash Futures Spread Facility:
- Early pay-in effect at client-level (under the same trading member) sale position in the stock futures of Equity Derivatives segment will be provided on T+2 day against receipt of shares in settlement pay-out of Equity Cash Segment.
- The pay-out shares of the Equity Cash Segment pertaining to the concerned member will be set aside and considered for giving effect to early pay-in of shares as aforesaid.
- The early pay-in effect will be provided (to the extent of quantity of shares received in the settlement) to the member’s same underlying stock futures position in the Equity Derivatives Segment based on the early pay-in file uploaded.
- Such early pay-in effect will continue to be available to the respective open position in the same underlying stock futures trade in Equity Derivatives Segment till expiry of the series.
- The early pay-in positions will be at Trading Member level, and the final settlement obligations will be at Clearing Member (CM) level in Equity Derivatives Segment, such early pay-in shares of the concerned trading member (under the same CM) will be adjusted against the concerned CM’s settlement obligations in Equity Derivatives Segment
The trades resulting out of the Cash Futures Spread facility is treated as any other normal trades in the respective segments viz Equity Cash Segment and Equity Derivatives Segment for the purpose of settlement process.