Settlement :
Primary responsibility of settling trades concluded in the WDM segment rests directly with the participants and the Exchange monitors the settlement. Mostly these trades are settled in Mumbai. Trades are settled gross, i.e. on trade for trade basis directly between the constituents/participants to the trade and not through any Clearing House mechanism. Thus, each transaction is settled individually and netting of transactions is not allowed.
Settlement is on a rolling basis, i.e. there is no account period settlement. Each order has a unique settlementdate specified upfront at the time of order entry and used as a matching parameter. It is mandatory for trades to be settled on the predefined settlement date. The Exchange currently allows settlement periods ranging from same day (T+0) settlement to a maximum of (T+2).
On the scheduled settlement date, the Exchange provides data/information to the respective member/participant regarding trades to be settled on that day with details like security, counter party and consideration.
The participants through their Subsidiary General Ledger (SGL) account (a book entry settlement system) settle government securities including treasury bills with RBI or through exchange of physical certificates. Other instruments are settled through delivery of physical securities.
Where trade is settled through the SGL account, exchange of securities and funds is done on DVP basis. Where trade is settled through delivery of certificates, the consideration is paid through cheque, payorder, Banker’s cheque or RBI cheque.
The required settlement details, i.e. certificate no., SGL form no., Cheque no., constituent etc. are reported by the member/participant to the Exchange.
The Exchange closely monitors the settlement of transactions through the reporting of settlement details by members and participants. In case of deferment of settlement or cancellation of trade, participants are required to seek prior approval from the Exchange. For any dispute arising in respect of the trades or settlement, the exchange has established arbitration mechanism for resolving the same.