Cash Market Settlement Process : NCFM Courses in Hyderabad
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The Cash Market settlement process begins as soon as member’s obligations are determined through the clearing process. The clearing banks and depositories provide the necessary interface between the custodians/clearing members (who clear for the trading members or their own transactions) for settlement of funds/securities obligations of trading members. The clearing corporation provides a major link between the clearing banks, clearing members and the depositories. This link ensures actual movement of funds and securities on the prescribed pay-in and payout day. The core processes involved in the settlement process are:
The cash market settlement process for transactions in securities in the CM segment of NSE is presented in the below:
(1) Trade details from Exchange to NSCCL (real-time and end of day trade file).
(2) NSCCL notifies the consummated trade details to CMs/custodians who affirm back. Based on the affirmation, NSCCL applies multilateral netting and determines obligations.
(3) Download of obligation and pay-in advice of funds/securities.
(4) Instructions to clearing banks to make funds available by pay-in time.
(5) Instructions to depositories to make securities available by pay-in time.
(6) Pay-in of securities (NSCCL advises depository to debit pool account of custodians/CMs and credit its account and depository does it).
(7) Pay-in of funds (NSCCL advises Clearing Banks to debit account of custodians/CMs and credit its account and clearing bank does it).
(8) Pay-out of securities (NSCCL advises depository to credit pool account of custodians/CMs and debit its account and depository does it).
(9) Pay-out of funds (NSCCL advises Clearing Banks to credit account of custodians/CMs and debit its account and clearing bank does it).
(10) Depository informs custodians/CMs through DPs.
(11) Clearing Banks inform custodians/CMs.
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Source: www.nseindia side.com