How Settlement Process at NSE (National Stock Exchange) Works?

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How Securities Settlement Process at NSE (National Stock Exchange) Works?

 

This is how the securities settlement process at NSE (National Stock Exchange) of India works? The image below shows the process and below the image, we have mentioned the various steps involved in the settlement cycle..

 

How it works

 

And here is the explanation:

Step 1: Trade details from exchange to NSCCL (clearing house of NSE)
Step 2: NSCCL notifies the trade details to Clearing members/ Custodians
Step 3: Download of obligation/ pay-in advice of funds/ securities
Step 4: Instructions to clearing banks to arrange funds by pay-in time
Step 5: Instruction to depositories for same
Step 6: Pay-in of securities
Step 7: Pay-in of funds
Step 8: Pay-out of securities
Step 9: Pay-out of funds
Step 10: Depository informs custodians/ Clearing members through DP
Step 11: Clearing banks inform custodians/ Clearing members.

But this is easier said than done! There are various risks also during the settlement which cannot be ignored. Check out this article to know more about such risks in settlement.

 

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