Security Shortages - Close-out procedures at NSE

If the securities are not bought in the auction session (if there are no sellers even in the auction) they are deemed closed out at the highest price between the first day of the trading period till the day of squaring off or 20% greater than the official close price on the close out day, whichever is higher. This amount is credited to the receiving member’s account on the auction pay-out day and charged to the default broker who passes these charges on to the concerned client. 

In case of auction non-delivery i.e. the auction seller fails to deliver the securities on the day of pay-in day the deal will be squared up at the highest price on the NSE from the first day of the relevant trading period to the close out day or 20% greater than the official close price on the close out day, whichever is higher. The auction seller will have to pay this amount.

In case of auction bad-delivery i.e. the auction securities delivery reported as bad delivery the deal will be squared up at the highest price on the NSE from the first day of the relevant trading period to the close out day or 10% greater than the official close price on the close out day, whichever is higher. The auction seller will have to pay this amount.
 

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August 17, 2008 | Filed Under Stocks 

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