Attention of the members of Equity Cash Segment and Equity Derivatives Segment is drawn to BSE’s Notice Nos. 20120717-23 dated July 17, 2012, Notice No. 20120720-25 dated July 20, 2012 and Notice No.20120726-31 dated July 26, 2012, in respect of introduction of Cash-Futures Spread (CFS) facility.
In this connection, members of Equity Cash Segment and Equity Derivatives Segment are hereby informed that Risk Management and Clearing & Settlement process in respect of CFS facility will be as follows :
Margining :
As mentioned in the aforesaid BSE notices, the CFS facility will consist of 2 legs of trades viz. one equity segment leg and 2nd leg will be 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 will be applicable.
Early pay-in facility for Equity Derivatives Segment
1) Cash Futures Spread facility:
In order to provide the facility of early pay-in of shares in CFS the following process will be followed :
- 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.
- For this purpose, members will be required to upload a file (as per the format enclosed as Annexure-I) on T+1 day by the stipulated time providing relevant details as mentioned in the annexure.
- On the basis of the details in the said file, 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. In case of give-up of trades by the trading members in Equity Derivatives Segment, the trading members will be required to mention the CP code in the file and accordingly, the early pay-in effect will be provided to the Clearing Member taking such given-up position.
- The uploaded file will be treated as the member’s instructions for adjusting the shares received by them in pay-out of equity cash settlement to be adjusted as early pay-in for their sale position in stock futures of Equity Derivatives Segment 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.
- Members may note that, as 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
For the above purpose, the members will be provided a facility for updating/uploading files pertaining to early pay-in of securities through front end screen on BEFS module (file format and screen shot for the same are enclosed as Annexure –II). The members are advised to ensure that the nomenclature of files and details therein are entered correctly. The file should also be in the specified format and its incremental number should be checked thoroughly before uploading.
2) In addition to the aforesaid, members of Equity Derivatives Segment can also avail the facility of early pay-in of shares against their stock futures sale positions in equity derivatives segment as per the process to be informed shortly.
Settlement Process for Cash Futures facility :
The trades resulting out of the said Cash Futures facility will be treated as any other normal trades in the respective segments viz Equity Cash Segment and Equity Derivatives Segment for the purpose of settlement process.
In case of any clarification members may contact their respective Relationship Managers or any of the following :
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Sr. No
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Name of Officer.
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Contact No.
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1.
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Mr. Ankit Jain
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2272 8881
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2.
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Mr. Rayan Menezes
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2272 8467
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3.
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Mr. Ajay Darji
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2272 8468
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4.
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Mr. Nilesh Shah
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2272 8704
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For and behalf of Indian Clearing Corporation Ltd.
Asst. General Manager
Encl. : as above.
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