Yes, from 19th July 2021 onwards, DP charges will apply to BTST trades due to changes in the settlement process. Previously, DP charges were not levied on such trades. Let’s delve into understanding the impact of these changes and how DP charges have become applicable.
Old Settlement Process (Before 19th July 2021):
Suppose you purchased 1000 shares of HDFC Bank on 19th May (Wednesday) and sold them on 20th May (Thursday) resulting in a BTST transaction:
However, this system posed challenges, especially when BTST trades were executed on the Ex-date of corporate actions. The brokers would unintentionally receive dividends or bonus/split shares from BTST stocks because the Clearing Corporation recognised the broker as the share owner. This process was cumbersome and often led to confusion.
New Settlement Process (Post 19th July 2021):
A directive from NSE on 6th May 2021 introduced a more streamlined settlement process. Instead of moving shares from the client's Demat to FYERS' pool and then to the Clearing Corporation, clearing members can now ‘EPI Mark’ securities directly from the client’s demat account.
Using the previous HDFC Bank example:
Advantages of the New Process: