InvestorQ : Can you explain the clearing and settlement process in detail on the NSE?
ishika Banerjee made post

Can you explain the clearing and settlement process in detail on the NSE?

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NISHA Nayak answered.
3 years ago
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The clearing process involves the determination of what counter-parties owe, and which counter-parties are due to receive on the settlement date, thereafter the obligations are discharged by the settlement. The clearing and settlement process comprises of three main activities- clearing, settlement and risk management.
The following is the clearing process on the NSE:
  • Trade details from Exchange to NSCCL (real-time and end of day trade file).
  • NSCCL notifies the consummated trade details to clear members/custodians who affirm back. Based on the affirmation, NSCCL applies multilateral netting and determines obligations.
  • Download of obligation and pay-in advice of funds/securities.
  • Instructions to clearing banks to make funds available by pay-in time.
  • Giving instructions to depositories to make securities available by pay-in-time
  • Pay-in of securities (NSCCL advises depository to debit pool account of custodians/CMs and credit its account and depository does it)
  • Pay-in of funds (NSCCL advises Clearing Banks to the debit account of custodians/CMs and credit its account and clearing bank does it)
  • Pay-out of securities (NSCCL advises depository to credit pool account of custodians/CMs and debit its account and depository does it)
  • Pay-out of funds (NSCCL advises Clearing Banks to credit account of custodians/CMs and debit its account and clearing bank does it)
  • Depository informs custodians/CMs through DPs
  • Clearing Banks inform custodians/CMs.
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