Handling Funds Shortages in Trading and Settlement

The trading and/or clearing facility of the members will be withdrawn if they fail to fulfill their funds obligations. This applies to valuation debit as well i.e. the amount to be debited from the members’ account as an initial amount towards short fall of securities on the pay-in day. Further, securities pay-out, due to such clearing member shall also be withheld. 

The above provisions shall apply if net cumulative fund shortage for a member is:
1. Equal to or greater than Rs. Five (5) lakhs at the end of pay-in.
2. Equal to or greater than Rs. Two (2) lakhs for six (6) or more occasions in the last three (3) months on any given day.

In case, the member is disabled on account of (2) above, on making good the shortage amount, the member shall be permitted to trade subject to its providing a deposit equivalent to its cumulative funds shortage as the ‘funds shortage collateral’. Such deposit shall be kept with the Clearing Corporation for a period of ten settlements and shall be released only if no further funds shortages are reported for the member in next ten consecutive settlements. Members may further note that there shall not be any margin benefit or any interest payment on the amount so deposited as ‘funds shortage collateral’. The amount may be provided by way of cash, fixed deposit receipts, or bank guarantee, equivalent to the cumulative funds shortage.

Apart from the above, the member will be required to pay a penal charge on the amount outstanding at the end of the day, till the amount is recovered. Further, for every case of non-fulfillment of funds pay-in obligations, penalty points are levied on members.

Source: NSE Website  
Home > NSCCL > Clearing & Settlement > Equities > Funds Settlement > Funds Shortages
 

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