Settlements
What is meant by ‘X’ Settlement or Cash Settlement?
Cash settlement occurs when a client has purchased equity shares in delivery, but the exchange failed to deliver the shares on T+2 days. There are two ways settlements happen if there is a delivery shortage: Internal Settlement: Internal settlement ...
What will happen if my intraday equity short position is not squared off by EOD?
In case your Intraday Equity short position is not squared off due to the absence of buyers or failed due to any reasons. This will be considered as short delivery, which means the seller of the shares has defaulted on the settlement of shares hence ...
What will happen if my Intraday F&O positions are not squared off by EOD?
Your intraday positions will be auto squared off by our RMS after reaching a threshold time to do so. For Equity, F&O, Currency and commodities segment the intraday square off will commence 15 minutes before the market closes. However, it is ...
What is T+2 settlement?
T refers to the day on which the transaction took place. This means that the buyer must pay the amount in full to the seller by the second trading day after the transaction and the seller must provide the shares to the buyer by the second trading day ...
What is settlement cycle?
Settlement cycle refers to the period in which the buyer and seller of shares settle their obligation to each other. In India, we follow the T+2 settlement cycle. So, if the transaction takes place on Monday, the settlement will be done on the second ...
What is rolling settlement?
In a rolling settlement, each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. Trades in the rolling settlement are settled on a T+2 basis i.e. on the 2nd working ...
What is Trade for Trade (T for T) segment?
Unlike in rolling settlement, scrips listed in Trade for Trade segment are settled on a trade for trade basis and no netting off of obligations is allowed. This means that scrips listed under this segment cannot be sold before they have been settled, ...
What is an auction?
An auction occurs when the seller of the shares has not made available the shares on the settlement day. To fulfil the obligation to the buyer of the shares, the exchange carries out an auction for the shares in the open market.
What is a short delivery?
This refers to a situation wherein the seller of the shares does not make the shares available to the buyer on the settlement day. This results in the buyer not getting the shares credited to his Demat account on the T+2 day.
What is the extra charge that the seller has to incur for short delivery?
The seller who fails to deliver the shares to the buyer will be debited the difference between auction settlement price and the original price along with an auction penalty of 0.05% per day that the seller fails to deliver the shares. In case the ...
What happens if the shares are not bought during the auction conducted by the exchange?
If the auction fails, then the exchange will close out the transaction by settling the buyer’s obligation in cash. The close-out price paid to the buyer will be the highest price of the stock from the transaction day till the auction day or 20% ...