23:58 Sep 15, 2019
CCILCCIL > FAQ > Security Settlement
1.  What types of trades are settled through CCIL?
2.  Is it a pre-requisite to become a member of RBI-CBS/ NDS for settlement through CCIL? 
3.  Under what circumstances the trade will be rejected?
4.  What is the cut off time for secondary market transactions and when are trades received by CCIL for Clearing and Settlement?
5.  What is shut period? 
6.  What is DVP-III and where are the trades settled? 
7.  When the members are informed of completion of settlement? 
8.  What are the different reports that are sent to the members? 
9.  How the reports will be made available to members? 
10.  How CCIL handles the shortages in securities in case of non-delivery for securities obligation by a member? 
11.  How CCIL handles the shortage of funds in case of non-delivery of funds obligation by a member ? 
12.  In case of default by a member, what are the Default charges? 
13.  How is the non-defaulting member compensated in case a trade is allocated? 
14.  When is the member expected to make good the shortfall in funds and securities? 
15.  Where do I find the FAQ’s for Triparty Repo?



1.

 What types of trades are settled through CCIL?

The secondary market transactions in Government securities are settled through CCIL. The trades concluded in Outright, Market Repo and Triparty repo market are received for settlement and  securities in which trades are received include Treasury Bills, Central Government Securities, State Government Securities, STRIPS and When Issued - both New Issues and Re-Issues.

 

 

2.

 Is it a pre-requisite to become a member of RBI-CBS/ NDS for settlement through CCIL? 

Yes. Only trades done by an RBI-CBS/ NDS member which are received by CCIL are processed for Clearing and Settlement by CCIL.

 

 

3.

 Under what circumstances the trade will be rejected?

The Clearing Corporation shall have the right to reject the trades reported to it by the members for settlement under the following conditions:

o When the aggregate value of the trades done by the member has exceeded his risk exposure limits. Such trades are accepted for settlement without Guarantee.

o When one of the counter-parties to the trade has been suspended or has been rendered ineligible to avail of the Clearing Corporation's services whether temporarily or otherwise.

o When one of the counter-parties to the trade is not a member of CCIL.

o When the trade has been received by the Clearing Corporation from the  trading system after cut-off timings rendering the clearing and settlement of the relative trade for that settlement date impossible.

o In the event of the sudden development when clearing and settlement operations for the particular settlement date have been temporarily suspended.

o When there is any inaccuracy in the reporting of the trade viz. incorrect NDS membership ID etc.

o Any other reasons as provided in CCIL Bye-Laws, Rules and Securities Segment Regulations.

 

 

4.

 What is the cut off time for secondary market transactions and when are trades received by CCIL for Clearing and Settlement?

The secondary market timing for settlement type T+0 and T+1 shall be as stipulated by RBI for that business day. The trades from NDS-OM and CROMS flow online for exposure monitoring, Clearing and Settlement.  On each settlement day, all trades  received by CCIL and due for settlement on such day are processed immediately after the closure of market trading hours for  Government securities transactions for T+0 settlements.  All trades concluded for T+1 settlement date are processed by CCIL after the closure of market trading hours for T+1 settlement. 

 

 

5.

 What is shut period?

Shut period refers to the period during which no settlements are permitted in a security.

 

 

6.

 What is DVP-III and where are the trades settled? 

DVP III is a settlement process in which settlements are done on Delivery versus Payment after achieving multilateral netting. For each Settlement date, the funds are netted for all secondary market transactions in Government securities market whereas in case of securities, the multilateral netting is achieved for each member separately for his SGL and CSGL account and within each such account for each ISIN. The netting for demat trades is at constituent level, then at CCIL Member level through whom the trade is received and then at depository level. Securities settlement for proprietary and constituent outright and market repo trades are settled in the SGL and CSGL account respectively. The demat trades are settled in the CSGL of the depository. Triparty repo trades securities are settled in the Triparty Repo gilt account of the member maintained with CCIL. The funds settlement is achieved in the RBI/ Settlement Bank current account of the member.

 

 

7.

 When the members are informed of completion of settlement? 

The generation of settlement status report by CCIL and making it available to members in their Report Server is the time when CCIL informs the member of completion of settlement process. The information to members of completion of settlement on a normal week day may be expected around 4.30 p.m on all working days.

 

 

8.  What are the different reports that are sent to the members? 

The different reports that are made available to members are:

o Trade Acceptance Report.

o Rejected Trade Reports - Securities.

o Trade Exceeding Exposure Limit (in case a member exceeds the exposure limit).

o Modified Settlement Date Report.

o Final Settlement Obligation Report for Securities.

o Final Settlement Obligation Report for Funds.

o Settlement Status Report.

o Interim Settlement Obligation Report for Funds.

o Interim Settlement Obligation Report for Securities.

o Funds and Securities Shortage Report                                                                               

  (in case of shortage in funds or securities pay-in).

o Security Shortage Allocation Report.

o Securities and Funds Replenishment Report.

o Security and Funds release Report.

o Form IV for Gilts trade

o Form IV for REPO trade

o Consolidated Funds Pay-in/Pay-out Obligation Report

o Report on Cancellation / Postponement of WI/Auctions Trades

o Provisional Pay-out Instructions

o Securities Obligation Report for Depositories

o Modified Securities Obligation Report for Depositories

o Consolidated Securities Position at Depository

o Fund Settlement Report – RBI

o Fund Settlement Report – DSB

o Pay-In/Pay-out Obligations in respect of DSB Members

o Trade Withdrawal Report due to First Leg Shortage Allocation

               
 

9.

 How the reports will be made available to members? 

All Reports are made available to members through CCIL Report Server.

 

10.

 How CCIL handles the shortages in securities in case of non-delivery for securities obligation by a member? 

The Security shortage shall be met from Settlement Guarantee Fund (SGF) and/ or Security Line Of Credit Account (SLOC) and / or balances in its Proprietary SGL Account and funds payment / securities pay out to the defaulting member will be withheld. In Case the available pay-Out is not sufficient, then available balance in the  concerned member's margin account will be blocked to cover the value of shortage handled. 

 

 

11.  How CCIL handles the shortage of funds in case of non-delivery of funds obligation by a member ? 

CCIL shall for the purpose of completion of settlement access the Rupee Line of Credit available for the purpose and / or the balances in its RBI Current account for meeting the funds shortage of members. The securities pay out to the concerned member will be withheld. 

 

12.  In case of default by a member, what are the Default charges? 

The defaulting member is charged a default charge of 5 basis points per hundred per day on the amount of default in funds or security plus taxes. The default charges are subject to changes from time to time.

 

13.

 How is the non-defaulting member compensated in case a trade is allocated? 

In case of Securities shortage, the non-defaulting member is compensated on shortage day through cash compensation. Any loss to the non-defaulting member on account of purchase of the security under shortage, from the market  can be claimed by the non-defaulting member on the immediate next business day by providing details of such transactions concluded in the secondary market. Similarly, in case of funds  shortage allocation, the non-defaulting member is compensated through securities and he can claim the loss, if any, on the next business day by providing details and rate at which that security is sold by the member in the market.

 

 

14.

 When is the member expected to make good the shortfall in funds and securities? 

A member is expected to replenish the funds / security on the next business day along with charges. 

 

 

15.  Where do I find the FAQ’s for Triparty Repo?


FAQ's for Triparty Repo is available in CCIL website under menu bar "Triparty Repo".

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