InvestorQ : What is the settlement mechanism for IRFs under different circumstances?
swati Bakhda made post

What is the settlement mechanism for IRFs under different circumstances?

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Dia Deshpande answered.
3 years ago
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Settlement of futures contracts on interest rate will be done as under:

Daily Mark-to-Market Settlement

The positions in the futures contracts for each member is marked-to-market to the daily settlement price of the futures contracts at the end of each trade day. The profits/ losses are computed as the difference between the trade price or the previous day’s settlement price and the current day’s settlement price. The CMs who have suffered a loss are required to pay the mark-to-market loss amount to NSE Clearing which is passed on to the members who have made a profit. This is known as daily mark-to-market settlement.

Daily mark to market settlement in respect of admitted deals in Interest rate futures contracts is cash settled by debit/ credit of the clearing accounts of clearing members with the respective clearing bank.

All positions (brought forward, created during the day, closed out during the day) of a clearing member in futures contracts, at the close of trading hours on a day, shall be marked to market at the daily settlement price and settled on T+1 day basis. The settlement shall be netted with the settlement of Currency futures.

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