Financial Implications of Short Deliveries

What penalties does a seller face for short delivery of shares?

If a seller is unable to deliver the promised shares, they will be charged the difference between the auction's settlement price and their original selling price. Furthermore, an auction penalty of 0.05% per day is levied for each day the shares remain undelivered. If the exchange decides to close out the transaction, the seller is charged the difference between the close-out price and the initial transaction price.

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