NSE introduces same-day settlement scheme

Leading bourse National Stock Exchange (NSE) has introduced a same-day settlement scheme, under which the members can save on additional margins if the payments for trades are made before the opening of next trading session.

In a circular to come into effect from March 15, NSE said the members opting for this 'T+0' facility (which refers to settlement on same day of the trading) would need to make the payments by 8.30 am on the next settlement day. The day's trading begins at about 9 am at the bourses.

Normally, the members are allowed to make the payments after the opening of trading hours in the next trading session under the T+1 settlement.

However, any major crash in the stock prices expose the members to the risk of paying scaled up margins, if the existing margins become insufficient to meet the payment obligations under the existing facility. The new facility would mitigate this risk of additional margin payment obligations.

NSE said that the members can opt for 'T+0' facility at any time, but they need to intimate the Clearing Corporation in advance about the same in a specified format, while they also need to give  a prior intimation for revoking this facility.

"The pay-in of T+0 settlement obligation for such clearing members shall be done at 8:30 AM on the next settlement day," NSE said in the circular.

"Clearing members who opt for pay-in on T+0 basis would not be levied scaled up margins," it added.

The exchange said that non-payment or partial payment of settlement obligation by the scheduled time would be construed as non-compliance and penalties applicable for fund shortages from time to time would be levied.