The Clearing and Settlement mechanism for the Retail trading in G-Secs is based on the existing institutional mechanism available at the Stock Exchanges for the Equity Markets. The trades executed throughout the continuous trading sessions will be netted out at the end of the trading hours through a process of multilateral netting. The transactions will be netted out member-wise and then scrip-wise so as to determine the net settlement and payment obligations of the members.

The Delivery obligations and the payment orders in respect of these members are generated by the Clearing and Settlement system of the Exchange. These statements indicate the pay-in and pay-out positions of the members for securities and funds who would then give the necessary instructions to their Clearing Banks and depositories.

Custodial confirmation of the retail trades in G-Secs by using 6A-7A mechanism as available in the Equity segment is also available. The schedule of various settlement related activities like obligation download, custodial confirmation, pay-in/pay-out of funds and securities is similar to what is at present applicable in the equities segment. As per an RBI Circular, the RBI regulated entities are to settle their transactions in the Retail Debt Segment at the Exchange through a Custodian.