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Funds Settlement
NSE Clearing has empaneled 14 clearing banks namely Axis Bank Ltd., Bank of India, Canara Bank, Citibank N.A, HDFC Bank, Hongkong & Shanghai Banking Corporation Ltd., ICICI Bank, IDBI Bank, IndusInd Bank, Kotak Mahindra Bank, Standard Chartered Bank, State Bank of India, Union Bank of India and JP Morgan Chase Bank
Every Clearing Member is required to maintain and operate clearing accounts with any of the empaneled clearing banks at the designated clearing bank branches. The clearing accounts are to be used exclusively for clearing & settlement operations.
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Funds Settlement
Members are informed of their funds obligation for various settlements through the Obligations reports. The daily funds statement gives date-wise details of each debit/ credit transaction in the member’s clearing accounts whereas the bank summary statement summarizes the same information for a quick reference.
The member’s primary clearing account may be debited for various types of transactions on a daily basis. The member is required to ensure that adequate funds are available in the primary clearing account towards all obligations, on the scheduled date and time. Members may refer to their obligation statements and provide for funds accordingly.
The members with a funds pay-in obligation are required to have clear funds in their primary clearing account on or before 10.30 a.m. for T+1 Settlement Cycle on the settlement day. The payout of funds is credited to the primary clearing account of the members on or after 1.30 p.m. on the settlement day.
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Funds Shortages
Members failing to fulfil their funds obligations (including STT/ Stamp duty obligation and Capital Cushion requirement) by the scheduled date and time (all markets including the valuation debit raised on account of securities shortages) to Clearing Corporation shall be subjected to the following penalty structure:-
| S. No | Type of Non-fulfilment | Penalty Charge % per day | Action |
| a) | Value Rs. 5 lakhs or more | 0.07 | The trading facility of the member shall be withdrawn immediately, and securities pay out shall be withheld. |
| b) | Value less than Rs. 5 lakhs | 0.07 | If in the last three months, the member is short over Rs. 2 lakhs on six or more than six occasions, the trading facility of the member shall be withdrawn, and securities pay out shall be withheld* |
*In case, the member is disabled on account of (b) 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.
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Primary Clearing Account
Every clearing member shall maintain and operate a separate and distinct primary clearing account for the capital market segment with any one of the designated clearing banks at the designated branch of the bank. The primary clearing account shall be used for clearing and settlement operations i.e., for settling funds obligation, payment of margins, release and enhancement of collateral, EPI of funds, penal charges, etc as may be specified by the Clearing Corporation from time to time.
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Additional Clearing Accounts
Further, every clearing member shall be able to additionally maintain and operate additional clearing account(s) with the designated clearing bank(s) other than in which primary account is maintained, for the purpose of enhancement of collaterals in the form of cash through CIM.
Release of cash collateral, collateral enhancement shall be routed through the secondary clearing account of the member if specified by the member.
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Operation Of Clearing Account
Clearing members shall irrevocably authorize, the clearing banks to access their clearing accounts for debiting and crediting their clearing accounts as per the instructions of the Clearing Corporation, reporting of balances and other information as may be required by the Clearing Corporation from time to time. Please refer to formats specified in Consolidated Circular CMPT67751 Part C (4) – ‘Format of Authorisation letters to be submitted by the member for operation of Clearing Bank Account’
Clearing members can deposit funds into these accounts in any form and can withdraw funds from this account only in self-name.
Clearing members having funds obligation to pay shall have clear balance of requisite funds in the clearing accounts on or before the stipulated funds pay-in day and the stipulated time.
Clearing members shall not seek to close or de-activate the clearing accounts without the prior written consent of the Clearing Corporation
The clearing banks shall debit/credit the clearing accounts of the clearing members as per instructions received from the Clearing Corporation from time to time. Any request from the clearing members for revoking the authorization furnished by them shall not be considered by the clearing banks. The clearing banks shall not close the clearing accounts or permit deactivation of the same without the prior written consent of Clearing Corporation.
All bank confirmations received from clearing banks on behalf of the members towards margins, funds pay-in, EPI of funds, collateral enhancements etc. shall be given effect only after receiving a written/electronic confirmation from their respective clearing banks
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Procedure for Change in Primary Clearing Banks
In case a clearing member wishes to shift the primary clearing account from one designated clearing bank to another, the following procedure shall be followed:
The clearing member shall request the primary clearing bank in writing for issuing a No Objection Certificate (NOC) for shifting of the primary clearing account.
The clearing member shall request the Clearing Corporation in writing seeking its permission for shifting of the primary clearing account and enclose the NOC received from the existing primary clearing bank in this regard or where the NOC is not received, furnish an acknowledged copy of the NOC request along with a declaration to the effect that no response has been received from the existing primary clearing bank in respect of the NOC request even after a minimum waiting period of a fortnight.
On opening the clearing account with the other designated clearing bank, the clearing member shall submit to the Clearing Corporation the documents relating to the new primary clearing account issued by the clearing banks as mentioned in Consolidate Circular CMPT67751 Part C (4) Format of Authorization letters to be submitted by the member for operation of Clearing Bank Account.
The clearing member communicates the date from which the new primary clearing account shall be operational with the clearing corporation, post confirmation from the clearing corporation the primary account shifting is done. The existing clearing Bank account is discontinued, and new account is added.
The Clearing Corporation shall thereon communicate the date from which the new primary clearing account shall be operational.