The pay-in and pay-out of funds and securities is through the designated bank accounts and securities settlement account respectively. Transactions are settled on a T+1 day basis for the First Leg, Recall request & early repayment for all eligible series. Transactions are settled on reverse leg settlement date of the respective series.

Designated Bank Account

The bank account currently used by Participant for settlement of funds in the Capital Market segment is the designated bank account for giving effect to funds debits/credits under SLBS.

Securities Settlement Account

Participants are required to maintain accounts with both depositories i.e. NSDL & CDSL. The pool account currently used by Participants in NSDL for effecting securities pay-in and pay-out in the Capital Market segment is used for settlement under SLBS.

In case of CDSL, Participants are required to open a separate settlement account for effecting securities pay-in and pay-out under SLBS.

Client direct payout facility

Participants / Custodians have been provided the facility of crediting the payout of securities directly to clients account. In order to avail of this facility, participant/custodian are required to provide a file in the specified file format available in SLB Circular (Ref. Circular No: NSE Clearing/SLBS/2008/001) containing details of the beneficiary accounts to which direct credit is to be given.

Process of return of securities

The borrowing Participants are required to return the securities borrowed on reverse leg settlement date of the respective series. The securities are returned to the lender of the securities by NSE Clearing on respective reverse leg settlement date of the series. In the case of borrower failing to return securities, NSE Clearing conducts an auction for obtaining securities. In the event of failure to procure securities in auction the transactions are financially closed-out on the basis of the close-out computation formula.

Shortages and Close out

In the event of funds shortage by the borrower, the SLBS transactions are cancelled and the securities returned to the lenders along with lending fees.

In the event the lender fails to deliver securities, the transaction is closed out as per the below procedure.

Higher of:

25% of closing price of the security on T+1 day (closing price for the security in the capital market segment of NSE), or

(Maximum trade price of the security in the capital market segment of NSE from T to T+1 day) - (T+1 day closing price of the security in capital market segment of NSE)

In the event the borrower fails to return the securities NSE Clearing conducts a buy-in auction in the Capital Market segment of NSE.

In the event of no offer in buy in auction/ failure to give delivery for offer in auction market on the settlement date, the transaction is closed out as per the below procedure.

Higher of:

The maximum traded price in the Capital Market segment of NSE from (reverse leg settlement date – 1day) to reverse leg settlement date, or

25% above the closing price of the security in the capital market segment on the reverse leg settlement date.

In all cases of shortages, NSE Clearing may initiate various actions including withdrawal of access to the order matching platform, withhold of the securities/funds pay-out due to the Participant or any other action as may be intimated by NSE Clearing.