Clearing and settlement of deals shall be specified by the relevant authority from time to time. Currently all settlements for OFS are in accordance with SEBI circular SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/10 dated January 10, 2023, and circular SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/6 dated January 23, 2024.

Clearing members and custodians in capital market segment of NCL may continue to maintain the designated clearing corporation for OFS and will be permitted to change the designated clearing corporation for OFS as per process set out by the Clearing Corporations

Clearing and settlement of bids received in OFS on respective trading days shall be in following settlement type and series:

Members are required to refer the settlement calendar issued by clearing corporation for each OFS mentioning the settlement number, settlement date, settlement type, custodian confirmation timings and settlement timings

As per SEBI Circular SEBI circular SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/10 dated January 10, 2023, in case of institutional investors who place orders or bids with 100% of margin upfront, custodian confirmation shall be within trading hours. In case of institutional investors who place orders without upfront margin, custodian confirmation shall be as per the existing rules for secondary market transactions.

Custodians and members can use ‘NMASS’ interface to facilitate online order inquiry and confirmation. This interface would enable custodians associated with NSE Clearing Ltd. to carry out confirmations of bids placed across Exchanges. Members associated with NCL would be able to view the confirmation status of CP orders which are marked for confirmation by Custodians.

In case of rejection / non confirmation of institutional bids by the Custodians for upfront margin bids, such bids shall not be considered towards allocation. In case of rejection / non confirmation of institutional bids by the custodians where no upfront margin is paid, the obligation to fulfil the settlement will fall on the clearing member of the trading member who will settle the same through the respective Clearing Corporation selected by them for OFS.

Settlement shall take place on trade for trade basis. Obligation shall be computed at trading member/CP level across Exchanges and grossed up at clearing member/custodian level. The obligation shall be computed considering the allotment of bids provided by the Designated Stock Exchange for the OFS. 

The funds pay-in and securities pay-out shall happen through the settlement account and pool account of the clearing member/custodian in capital market segment.

For non-institutional orders or bids and for institutional orders with 100% margin, settlement shall take place on T+1 day. In case of orders or bids of institutional investors with no margin, settlement shall be as per the existing rules for secondary market transactions.

Settlement for bids received on T+1 day shall be carried out as per the existing rules for secondary market transactions.

Clearing Corporation shall collect 100% margin in cash from non-institutional investors for bids placed on T day and T+1 day of OFS. In respect of bids in the retail category on T+1 day of OFS, clearing corporation shall collect margin to the extent of 100% of order value in cash or cash equivalents.

Margins in form of cash shall be provided as early pay-in (EPI) of funds for the settlement type as ‘H’ and settlement number as specified for the respective OFS. The procedure for providing EPI of funds shall be same as being done currently through the Collateral Interface for Members (CIM) in Capital market segment. The EPI of funds confirmed by the primary clearing bank shall be considered as collaterals for order validation. The primary clearing banks shall not be able to confirm the funds placed by the members / custodians post OFS bidding period.

Trading Cum Clearing Members and Professional Clearing Members will be required to set trading member wise limits.  Based on the type of the bid, margins shall be blocked from the limits of the trading member set by clearing member. In respect of Self Clearing Member and Custodian the margins shall be blocked from the collateral provided by the clearing member/custodian.   

Clearing member who wish to utilise the cash or cash equivalents provided as collaterals towards OFS shall make the required amount available in collateral pool and send mail to collaterals_ops@nsccl.co.in to block the collateral towards OFS. Subsequently clearing members can set trading member-wise limits through facility provided in CIM system as given below

• Trading member wise limits can be set based on early pay-in of funds provided by the clearing member and that shall not exceed the total early pay-in of funds for a settlement type and settlement number
• Trading member wise limits can be set based on collateral provided by clearing member and that shall not exceed the total collateral
• Only upward revision of trading member wise early pay-in of funds and collateral limits will be allowed

EPI of funds in excess of order value and for unallocated bids shall be released on T Day (T being the day of OFS) after download of obligations.

These funds shall not be utilized against any other obligation of the trading member or co-mingled with other segments.

The clearing member of seller(s) shall deposit the entire quantity of shares offered for sale including the additional shares disclosed, as pay-in with the designated clearing corporation prior to the commencement of the offer. No other margin shall be charged on the seller(s).

In case of default in pay-in by any investor, 10% of the order value shall be charged as penalty from the investor and collected from the broker. This amount shall be credited to the Investor Protection Fund of the stock exchange. In such a case, on the settlement day the Custodian / Trading member shall be required to inform NSCCL on the shortage details.

Settlement Guarantee Fund shall not be available for OFS through stock exchange mechanism

Securities Transaction tax (STT) shall be applicable on transactions executed on exchange, as specified in circulars issued by Exchanges from time to time. Members shall be required to pay the STT, along with the pay-in obligation. The STT amount shall be collected as per the timelines stipulated for the funds pay-in. A separate transaction shall be created, and the monies shall be collected from the settlement account of members through their clearing banks as per the process currently followed in respect of settlement obligations.

Stamp duty shall be collected on allotted quantity. Stamp duty shall be determined on the trade date as mentioned in the settlement calendar issued from time to time by way of circular. Stamp duty calculation shall be done as per methodology specified below. Members may note that the value of taxable securities transaction and the applicable State/Union Territory (UT) shall be determined with respect to the Offeror (Seller). If the state/UT of the Offeror is not available then the state of member through whom transaction was executed will be considered. Members shall be required to pay the stamp duty, as part of and along with the pay-in obligation. The stamp duty amount shall be collected as per the timelines stipulated by the Clearing Corporation from time to time. A separate transaction shall be created and the monies shall be collected from the settlement account of members through their clearing banks as per the process currently followed in respect of settlement obligations.