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CMPT63669

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kapeelvora81
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DEPARTMENT: CAPITAL MARKET

Download Ref No: NCL/CMPT/63669 Date: Aug 30, 2024

Circular Ref. No: 179/2024

All Members/ PCMs,

Sub: Enhancement of operational efficiency and Risk Reduction – Operating guidelines


for Pay-out of securities directly to client demat account

This has reference to SEBI circular ‘Enhancement of operational efficiency and Risk Reduction
- Pay-out of securities directly to client demat account’ reference number
SEBI/HO/MIRSD/MIRSD-PoD1/P/CIR/2024/75 dated June 05, 2024, and NCL circular
NCL/CMPT/62339 dated June 06, 2024.

1. Operating guidelines for Pay-out of securities directly to client demat account:


The standard operating guidelines of ‘Pay-out of securities directly to client demat
account’ is attached as Annexure I.
2. Mapping of demat account in UCC database of Exchange: It shall be mandatory
tor trading members to update primary demat account in UCC database of Exchanges
of all such clients that clear and settle trades with their clearing member. Clearing
corporation shall credit pay-out of securities that is identified as primary in Exchange
UCC and is verified by Depositories. Please refer exchange circular (NSE/ISC/62810
dated July 05, 2024, NSE/ISC/63535 dated August 23, 2024, BSE Notice No. -
20240705-37 dated 05 Jul 2024 and BSE Notice No. - 20240823-55 dated August 23,
2024) and any other circular issued by exchanges from time to time in this regard. The
detailed guideline in this regard is provided in point 3 of Annexure 1.
3. Opening of TM pool accounts: It shall be mandatory for Trading members of Capital
market or F&O segment, clearing trades with other clearing member to open Trading
member pool accounts in both depositories. The detailed guideline in this regard is
provided in point 5(ii) of Annexure 1.
4. Opening of TM/CM CUSPA: Trading/ Clearing members need to maintain Client
Unpaid Security Pledge Account (CUSPA) in depository where their client has demat

Confidential
account. The guidelines regarding maintenance of TM/CM CUSPA by Trading/
Clearing member are specified are specified in point 6 of Annexure I. Accordingly,
a. Trading members shall maintain only TM CUSPA a/c.
b. Self-Clearing Members shall maintain only TM CUSPA a/c and not maintain
CM CUSPA a/c.
c. Trading member cum clearing member shall open maintain both TM CUSPA
and CM CUSPA.
d. Professional clearing members shall open CM CUSPA only.
5. Opening of TM CSMFA: Trading members offering Margin trading Funding facility to
their clients need to maintain Client Securities under Margin Funding Account
(CSMFA) in depository where their client has demat account. The detailed guideline in
this regard is provided in point 6 of Annexure 1.
6. Reporting of Unpaid securities and funded stocks: A facility shall be provided to
members to report request to release payout with pledge in favour of CUSPA (Unpaid)
/ pledge in favour of CSMFA accounts (MTF). The operational procedure for same is
provided as Annexure 2. Additionally detailed guideline in this regard is provided in
point 8 of Annexure 1.
7. Discontinuation of client direct pay-out facility: In view of SEBI circular, the current
facility of ‘Direct payout to investor accounts’ as specified in part C, point 6 of NCL
consolidated circular NCL/CMPT/ CMPT61800 dated April 29, 2024, shall be
discontinued. The guideline in this regard is provided in point 7 of Annexure 1.
8. Auction for internal shortages: It shall be mandatory for clearing members to use
internal auction mechanism of clearing corporation to handle internal shortages. The
detailed guideline in this regard is provided in point 14 of Annexure 1. Members shall
use existing auction facility specified in item 6.4 of NCL consolidated circular
NCL/CMPT/ CMPT61800 dated April 29, 2024, for auction of internal shortages.
Additional guidelines with respect to auction for internal shortages shall be provided in
subsequent circular.
9. Reporting of demat account of Custodial participant client: This reporting is
required by Clearing members of F&O segment who are clearing trades for custodial
participant clients not registered in capital market segment. The detailed guideline in
this regard is provided in point 4 of Annexure 1. For existing/ new CP codes created
hereafter clearing members shall provide details demat account to clearing corporation
and mail to [email protected] and [email protected] in following format.

Confidential
Mail subject: Demat details of non-custodian CP client in F&O
DP Client ID (8 char
CP CP CP DP ID (8 char
NSDL Client ID or 16
CODE name PAN NSDL DP ID)
char CDSL BO ID

10. Processing of pay-out: The circular shall be implemented in 2 phases. Phase 1 shall
be applicable from October 14, 2024, to January 13, 2025, and phase 2 shall be
applicable from January 14, 2025, onwards. In phase I, CC shall credit pay-out to
clearing member pool a/c for following cases:
a. Verified demat account not found in UCC of Exchanges.
b. Pay-out rejected by depositories for various reasons such as inactive client
account, Member CUSPA/CSMFA not active in depository, ISIN not active in
target depository etc.
c. Where clients have disabled standing Instruction/ auto credit of securities in
demat account and have not provided standing instructions during the day,
such pay-out shall be provided by next day.
d. Excess pay-in over gross pay-in obligation.
e. Payout pertaining to proprietary obligations.

In phase 2 such payout shall be credited to client demat/ source account as given in
Annexure 1.

11. Delivery Report for Direct pay-out


A separate delivery report shall be provided for direct pay-out information. The report
shall provide client wise security wise quantity credited to client account. The format
shall be same as existing delivery report and some of the reserved fields shall be used
to provide additional information. The details of format of the shall be provided in
subsequent circular.

For and on behalf of


NSE Clearing Limited

Rana Usman
Chief Operations officer – C&S

Telephone No Email id

18002660050 (IVR Option 2) [email protected]

Confidential

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