NSCCL

1.INTRODUCTION ON THE NATIONAL STOCK EXCHANGE (NSE)

The National Stock Exchange (NSE) is a exchange located is exchange located at Mumbai, Maharashtra, India. It is
the 9th largest stock exchange in the world by market capitalization and largest in India by daily turnover and number
of trades, for both equities and derivative trading. NSE has a market capitalization ofaroundUS$1.59 trillion and over
1,552 listings as of December2010. Though a number of other exchanges exist, NSE and the Bombay Stock
Exchange are the two most significant stock exchanges in India and between them are responsible for the vast
majority of share transactions. The NSE's key index is the S&PNifty, known as the NSE NIFTY (National Stock
Exchange nifty), an index of fifty major stocks weighted by market capitalization.
NSE is mutually-owned by a set of leading financial institutions, banks, insurance companies and other financial
intermediaries in India but its ownership and management operate as separate entities. There are at least 2 foreign
investors NYSE Euro next and Goldman Sachs who have taken a stake in the NSE. As of2006, the
NSE VSAT terminals, 2799 in total, cover more than1500 cities across India. NSE is the third largest Stock
Exchange in the world in terms of the number of trades in equities. It is the second fastest growing stock exchange in
the world with are corded growth of 16.6%.
The National Stock Exchange of India was promoted by leading financial institutions at the behest of
the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, it was
recognized as a stock exchange under the Securities Contracts,1956. NSE commenced operations in the
Wholesale Debt Market(WDM) segment in June 1994. The Capital market (Equities)segment of the NSE
commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000

1.1GROUPS OF NATIONAL STOCK EXCHGE

The National Securities Clearing Corporation Limited(NSCCL)

NSCCL

The National Securities Clearing Corporation Ltd. (NSCCL) a wholly owned subsidiary of
NSE, wasincorporated in August 1995. It was the first clearing corporation to introduce settlement guarantee.
Itcommenced clearing operations in April 1, 1996.NSCCL has been assigned the highest corporate rating of
'AAA' for three consecutive years. This is thefirst Indian Clearing Corporation to get this rating.
National Commodity

Clearing Limited (NCCL)

National Commodity Clearing Limited (NCCL) has been incorporated jointly between NSE and
NCDEX.Presently , the company provides IT and process support in respect of its clearing and settlement
oftrades done in derivatives segment. The clearing and settlement covers contracts in 44 products rangingfrom
agricultural commodities to base metals, ferrous metals, energy, polymers and precious metals.
NSE

Infotech Services Limited (NSETECH)

NSE Infotech Services Limited (NSETECH) is a wholly owned subsidiary incorporated to cater to theneeds of
NSE and all its group companies exclusively.
India

Index Services & Products Ltd. (IISL)

India Index Services and Products Limited (IISL), a joint venture between NSE and CRISIL Ltd., was setup in
May 1998 to provide a variety of indices and index related services and
Products for Indian capital markets. It has a consulting and licensing agreement with Standard and Poor's (S&P),
the world'sleading provider of investable equity indices.

2.THE NATIONAL SECURITIES CLEARING CORPORATION LTD (NSCCL)

The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of NSE, was incorporated
in August 1995. It was set up to bring and sustain confidence in clearing and settlement of securities; to promote and
maintain, short and consistent settlement cycles; to provide counter-party risk guarantee, and to operate a tight risk
containment system. NSCCL commenced clearing operations in April 1996.
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NSCCL carries out the clearing and settlement of the trades executed in the Equities and Derivatives segments and
operates Subsidiary General Ledger (SGL) for settlement of trades in government securities. It assumes the counterparty risk of each member and guarantees financial settlement. It also undertakes settlement of transactions on other
stock exchanges like, the Over the Counter Exchange of India.
NSCCL has successfully brought about an up-gradation of the clearing and settlement procedures and has brought
Indian financial markets in line with international markets.The Regulations framed hereunder shall be known as
National Securities Clearing Corporation (Capital Market) Regulations, 1996.
The NSE is a Mumbai-based stock exchange. It is the largest stock exchange in India and the third largest
in the world in terms of volume of transactions. The National Securities Clearing Corporation Ltd.
(NSCCL), a wholly owned subsidiary of NSE, was incorporated in August 1995. It was the first clearing
corporation to be established in the country and also the first clearing corporation in the country to
introduce settlement guarantee. NSCCL commenced clearing operations in April 1996.

2.1OVERVIEW OF THE NATIONAL SECURITIES CLEARING CORPORATION LTD

(NSCCL)
The NSCCL or the National Securities Clearing Corporation Limited is the clearing corporation of the National
Stock Exchange (NSE).
The NSE (National Stock Exchange) is a Mumbai-based stock exchange. NSE (National Stock Exchange) is the
largest stock exchange in India and the third largest in the world in terms of volume of transactions. The NSE
(National Stock Exchange) is mutually-owned by a set of leading financial institutions, banks, insurance companies
and other financial intermediaries in India but its ownership and management operate as separate entities.The NSE
has remained a lead player in the modernization of India's capital and financial markets.Towards this end the NSE
(National Stock Exchange) set up the first clearing corporation in India - the NSCCL (National Securities Clearing
Corporation Ltd). The NSCCL was a landmark in providing novation on all the spot equity market (and
later, derivatives market) trades in India.
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Part of the NSE Group (National Stock Exchange Group)

The National Securities Clearing Corporation Ltd. (NSCCL) is part of the NSE (National Stock Exchange) group
and is a wholly-owned subsidiary of the NSE. It was incorporated in August 1995 and started clearing operations in
April 1996. It was formed to build confidence in clearing and settlement of securities, to promote and maintain short
and consistent settlement cycles, to provide a counter-party risk guarantee and to operate a tight risk containment
system.
Clearing and Settlement
The NSCCL (National Securities Clearing Corporation Limited) carries out the clearing and settlement of the trades
executed in the CM segment of NSE (National Stock Exchange) and operates constituent SGL for
settlement trades in government securities.

Inter-region Clearing
The NSCCL (National Securities Clearing Corporation Limited) facilitates inter-region clearing. It has Regional
Clearing Centres at Delhi, Kolkata and Chennai and a Central Clearing Centre at Mumbai. Members have the option
of delivering or receiving the securities at a clearing centre chosen by them.
Certificates Handled
To provide a level playing field to members irrespective of their location, the NSCCL (National Securities Clearing
Corporation Limited) moves securities in the normal pay-in and pay-out on behalf of the Clearing Members from
and to Regional Clearing Centres (RCC) and the Central Clearing Centre (CCC) at Mumbai.
Pre-delivery Verification
The NSCCL (National Securities Clearing Corporation Limited) was the first to start pre-delivery verification to
detect bad papers such as fake and forged certificates or lost and stolen share certificates.
Dematerialised Settlement
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The only effective solution to the problem of fake/forged and stolen shares was dematerialised trading and
settlement. As SEBI made demat settlements mandatory in an ever-increasing number of securities in a phased
manner, the proportion of shares delivered in the dematerialised form by the NSCCL (National Securities Clearing
Corporation Limited) has increased.
Risk Management
The NSCCL has also incorporated risk containment measures. A risk group, constituted by the NSCCL (National
Securities Clearing Corporation Limited) identified additional areas of perceived risk and intensified the monitoring
of members' position having concentration in certain high-risk securities that attract high volumes and volatility.
Also a structured exercise of requiring unusually high pay-in liability members to make advance pay-in of funds has
been put in place, in addition to offering facility of early pay-in of securities in demat mode.
Securities Lending/Borrowing
The automated lending and borrowing mechanism of the NSCCL (National Securities Clearing Corporation Limited)
provides a facility to lend/borrow securities/funds at market-determined rates. This facilitates timely delivery of
securities and thereby improves the efficiency of the system.
Professional Clearing Membership
The NSCCL (National Securities Clearing Corporation Limited) started the Professional Clearing Membership and
the Stock Holding Clearing Corporation Ltd. has been admitted as the first professional clearing member on CM
Segment.
Derivatives Settlement
The NSCCL (National Securities Clearing Corporation Limited) also provides clearing and settlement services
including risk management for the derivatives market.
Multiple Depositories
The Central Depositories Securities Limited (CDSL) has been connected to the NSCCL (National Securities
Clearing Corporation Limited) and clearing and settlement of securities in dematerialised form through the CDSL
has also been introduced.
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Collateral FDRs
The NSCCL (National Securities Clearing Corporation Limited) accepts FDRs drawn in its favour and maintains
them in its custody. This has added value in services to the members as they are not any longer required to pay
custodial charges but can be given instantaneous credit and benefit.

DEFINITION OF 'NATIONAL SECURITIES CLEARING CORPORATION NSCCL'

A subsidiary of the Depository Trust & Clearing Corporation (DTCC) that provides centralized clearing, risk
management, information and settlement services to the financial industry. The NSCCL offers multilateral netting so
that brokers can offset buy and sell positions into a single payment obligation, thereby reducing financial exposure
and capital requirements.
The NSCCL and DTC (another subsidiary of the DTCC) play a major part in the settlement and clearing of securities
transactions. They are the largest providers of these services, worldwide.

NSCCL

2.2ABOUT NATIONAL SECURITIES CLEARING CORPORATION LIMITED

National Securities Clearing Corporation Limited is a Public Company incorporated on 31 August
1995. It is classified as Indian Non-Government Company and is registered at Registrar of
Companies, Mumbai. Its authorized share capital is Rs. 450,000,000 and its paid up capital is Rs.
450,000,000.
National Securities Clearing Corporation Limited's Annual General Meeting (AGM) was last held on 21
June 2013 and as per records from Ministry of Corporate Affairs (MCA), its balance sheet was last
filed on 31 March 2013.

National Securities Clearing Corporation Limited's Corporate Identification Number is (CIN)

U67120MH1995PLC092283 and its registration number is 92283. Its registered address is
EXCHANGE PLAZA C-1 BLOCK GBANDRA KURLA COMPLEX BANDRA EAST, MUMBAI - 400051,
Maharashtra INDIA.
There are 9 directors of National Securities Clearing Corporation Limited. Current status of National
Securities Clearing Corporation Limited is - Active.

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3.OBJECTIVES OF NSCCL
These Regulations shall be applicable to all clearing members admitted to the Capital Market Segment of the
National Securities Clearing Corporation hereinafter referred to as Clearing Corporation. These Regulations shall
also be applicable mutatis mutandis to all Clearing Members dealing in Debt segment of the Clearing Corporation
unless the context requires otherwise or unless otherwise specified by the relevant authority from time to time.
It was set up with the following objectives:

to bring and sustain confidence in clearing and settlement of securities;

to promote and maintain, short and consistent settlement cycles;

to provide counter-party risk guarantee, and

to operate a tight risk containment system.

NSCCL commenced clearing operations in April 1996. It has since completed more than 2400 settlements (equities
segment) without delays or disruptions.
National Securities Clearing Corporation Limited First Indian Clearing Corporation to get rated
CRISIL has assigned its highest corporate credit rating of AAA to the National Securities Clearing Corporation Ltd
(NSCCL). 'AAA' rating indicates highest degree of strength with regard to honouring debt obligations. NSCCL is the
first Indian Clearing Corporation to get this rating. The rating reflects NSCCLs status as Clearing Corporation for
NSE, Indias largest stock exchange. The rating also factors in NSCCLs rigorous risk management controls and
adequate settlement guarantee cover.

NSCCL

4.NSCCL-THE ORGANISATION

The National Securities Clearing Corporation Ltd. (NSCCL), a wholly owned subsidiary of NSE, was incorporated
in August 1995. It was the first clearing corporation to be established in the country and also the first clearing
corporation in the country to introduce settlement guarantee.
It was set up with the following objectives:

to bring and sustain confidence in clearing and settlement of securities;

to promote and maintain, short and consistent settlement cycles;

to provide counter-party risk guarantee, and

to operate a tight risk containment system.

NSCCL commenced clearing operations in April 1996. It has since completed more than 2400 settlements (equities
segment) without delays or disruptions.
National Securities Clearing Corporation Limited First Indian Clearing Corporation to get rated
CRISIL has assigned its highest corporate credit rating of AAA to the National Securities Clearing Corporation Ltd
(NSCCL). 'AAA' rating indicates highest degree of strength with regard to honouring debt obligations. NSCCL is the
first Indian Clearing Corporation to get this rating. The rating reflects NSCCLs status as Clearing Corporation for
NSE, Indias largest stock exchange. The rating also factors in NSCCLs rigorous risk management controls and
adequate settlement guarantee cover.

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4.1PRODUCTS & SERVICES OF NSCCL

Clearing & Settlement
Guarantee
Risk Management
Corporate Bonds
SMS Alerts
Clearing & Settlement
NSCCL carries out the clearing and settlement of the trades executed in the equities and derivatives segments of the
NSE. It operates a well-defined settlement cycle and there are no deviations or deferments from this cycle. It
aggregates trades over a trading period, nets the positions to determine the liabilities of members and ensures
movement of funds and securities to meet respective liabilities.
NSCCL has empanelled 13 clearing banks to provide banking services to trading members and has
established connectivity with both the depositories for electronic settlement of securities.
Read more about NSCCL's Clearing & Settlement functions for:

Equities

Security Lending & Borrowing Scheme (SLBS)

Mutual Funds

Equity Derivatives

Currency Derivatives

NSE Bond Futures

Retail Debt Market

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Corporate Bonds

Guarantee
NSCCL assumes the counter-party risk of each member and guarantees settlement through a fine-tuned risk
management system and an innovative method of on-line position monitoring.
A large Settlement Guarantee Fund provides the cushion for any residual risk. It operates like a self-insurance
mechanism where members contribute to the Fund. In the event of failure of a trading member to meet settlement
obligations or committing default, the Fund is utilized to the extent required for successful completion of the
settlement. This has eliminated counter-party risk of trading on the Exchange. As a consequence, credit risk no
longer poses any threat in the market place. The market has full confidence that settlement shall take place in time
and shall be completed irrespective of default by isolated trading members.
A separate Settlement Guarantee Fund is maintained for the Futures & Options segment.
Risk Management
A sound risk management system is integral to an efficient clearing and settlement system. NSE introduced for the
first time in India, risk containment measures that were common internationally but were absent from the Indian
securities markets.
NSCCL has put in place a comprehensive risk management system, which is constantly upgraded to pre-empt
market failures. The Clearing Corporation ensures that trading member obligations are commensurate with their
networth.
Risk containment measures include capital adequacy requirements of members, monitoring of member performance
and track record, stringent margin requirements, position limits based on capital, online monitoring of member
positions and automatic disablement from trading when limits are breached, etc.

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Read more about NSCCL's Risk Management systems for:

Equities

Securities Lending and Borrowing Scheme (SLBS)

Equity Derivatives

Currency Derivatives

NSE Bond Futures

Retail Debt Market

Subscribe to SMS Alerts

A facility wherein information in respect of some of the activities can be received by members through SMS is
provided to members.
The salient features of the new SMS Alert facility are as mentioned below:

Members can avail this facility in order to receive instant updates by way of SMS in respect of certain activities /
information.

Members can access the SMS application through a link on the Collateral Interface for Members (CIM).

Members can register multiple mobile numbers (Maximum 5 numbers per member) for receiving SMS by
registering multiple users with a flexibility to modify or deregister users.

Members have the flexibility to subscribe to or unsubscribe any message alerts.

Subscription to multiple message alerts for single mobile number or subscription to single message alert by
multiple mobile numbers is also permitted.

Members can replicate the subscriptions done for one user to another user.

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This alert facility is only an additional facility provided to the members for receiving the Alert / Information. The
members shall verify the information received by way of alert and not rely solely on such Alerts / Information for
any purpose. NSCCL shall not be liable for any delay or any other interruption which may occur due to any reason
including network (Internet) reasons or snags in the system, break down of the system or any other equipment, server
breakdown, maintenance shut down, breakdown of communication services or inability of NSCCL to send the Alert /
Information. Irrespective of whether the member has received the Alert / Information or not, the member shall be
required to adhere to all the Rules, Byelaws and Regulations and Circulars and all other requirements laid down by
NSCCL from time to time.
Members are requested to ensure that the mobile numbers of only the concerned officials are registered and updated
on regular basis in order to prevent the messages from being sent to unconcerned people.
Further, members are also requested to note that the alert messages may not be received if the mobile numbers
registered have opted for the Do not Disturb or such other restrictive options provided by various service providers.

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4.2.PARTNERS OF NSCCL
Our Partners
Clearing Members
Clearing Banks
Custodians
Depositories
Professional Clearing Members

Clearing Members
Clearing Member means a member of the Clearing Corporation who clears and settles deals through the Clearing
Corporation. The Clearing Member clears and settles deals for a segment in a manner and mode and subject to such
terms and conditions and procedures prescribed for them. Further, a Clearing Member may clear and settle deals
either on their own account or on behalf of their clients subject to the terms and conditions prescribed by the
Clearing Corporation.
In the Capital market Segment, all trading members of the Exchange are required to become the Clearing Member of
the Clearing Corporation.
In F&O Segment, trading members need not necessarily clear their own deals but can select another clearing member
or a professional clearing member to clear and settle their dues. Trading Members who are also Clearing Members,
can clear and settle their deals and also deals of other trading members who opt to settle their deals through the said
clearing member. 'Self Clearing Members' may clear and settle only their own proprietary trades and their clients
trades but cannot clear and settle trades of other trading members.

Clearing Banks

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NSCCL offers settlement of funds through 13 clearing banks namely Axis Bank Ltd., Bank of India, Canara Bank,
Citibank N.A, HDFC Bank, Hongkong & Shanghai Banking Corporation Ltd., ICICI Bank, IDBI Bank, IndusInd
Bank, Kotak Mahindra Bank, Standard Chartered Bank, State Bank of India and Union Bank of India.
Members may open their clearing accounts with any of the empanelled clearing banks for the purpose of settlement
of Exchange transactions.
The clearing banks are required to provide the following minimum services as a single window to all clearing
members of National Securities Clearing Corporation Ltd. as also to the Clearing Corporation:

Branch network in cities that cover bulk of the trading cum clearing members

High level automation including electronic funds transfer (ETF) facilities

Facilities like (a) dedicated branch facilities (b) software to interface with the Clearing Corporation (c) access
to accounts information on a real time basis (d) back-up procedures and fall back mechanism in case of failure of the
bank system

Value-added services to members such as free-of-cost funds transfer across centres etc.

Providing working capital funds

Stock lending facilities

Services as Professional Clearing Members

Services as Depository Participants

Other Capital Market related facilities

All other banking facilities like issuing bank guarantees / credit facilities etc.
Multiple clearing banks provide advantages of competitive forces, facilitate introduction of newproducts viz.
working capital funding, anywhere banking facilities, the option to members to settle funds through a bank, which
provides the maximum services suitable to the member.
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Contact Details of Clearing Banks

Axis Bank Ltd.
Bank of India Ltd.
Canara Bank Ltd.
Citibank N.A.
The Hongkong & Shanghai Banking Corporation Ltd.
ICICI Bank Ltd.
HDFC Bank Ltd.
IDBI Bank Ltd.
IndusInd Bank Ltd.
Kotak Mahindra Bank Ltd.
Standard Chartered Bank
Union Bank of India
State Bank of India

Custodians
Custodians are clearing members but not trading members. They settle trades on behalf of their clients that are
executed through other trading members. A trading member may assign a particular trade to a custodian
for settlement. The custodian is required to confirm whether he is going to settle that trade or not. If the custodian
confirms the trade, NSCCL assigns the obligation to the custodian. If the custodian rejects the trade, the obligation is
assigned back to the trading member.
Custodians Clearing members are required to request Clearing Corporation for allotment of Custodian Participant
(CP) code for the clients for which they wish to clear and settle. The request has to be made along-with
documentation for the said purpose like SEBI registration number, PAN number etc. depending on the category of
the client.

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Contact Details of Custodians

Axis Bank Ltd

BNP Paribas
Citibank N.A.
DBS Bank Ltd
Deutsche Bank A.G.
Edelweiss Custodial Services Limited
HDFC Bank Ltd.
Hong Kong & Shanghai Banking Corporation Ltd.
ICICI Ltd.
Infrastructure Leasing & Financial Services Ltd.
ILRTL
J P Morgan Chase
Kotak Mahindra Bank
Orbis Financial Corporation Ltd
Standard Chartered Bank
State Bank of India
Stock Holding Corporation of India Ltd.
SHRTL
SBI Custodial Services Pvt. Ltd.
Depositories
In order to promote dematerialization of securities, NSE joined hands with leading financial institutions to establish
the National Securities Depository Ltd. (NSDL), the first depository in the country with the objective of enhancing
the efficiency in settlement systems as also to reduce the menace of fake/forged and stolen securities. The second
depository in the country, CDSL promoted by the BSE and a few commercial banks, was granted certificate of
commencement of business in February 1999.
This has ushered in an era of dematerialized trading and settlement. SEBI has made dematerialized settlement
mandatory in an ever-increasing number of securities in a phased manner, thus bringing about an increase in the
proportion of shares delivered in dematerialized form. Today, more than 99% of settlement of securities takes place
in dematerialized form

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NSCCL has established connectivity with both the depositories for electronic settlement of securities.
Contact Details of Depositories
Central Depository Services (India) Ltd.
National Securities Depository Ltd.
Professional Clearing Members
Clearing Corporation admits a special category of members namely professional clearing members. Professional
Clearing Member (PCM) are clearing members who are not trading members. They are typically banks, custodians
etc. who clear and settle trades executed for their clients (individuals, institutions etc.).
In such an event, the functions and responsibilities of the PCM would be similar to Custodians. PCMs may also
undertake clearing and settlement responsibility for trading members. In such a case, the PCM would settle the trades
carried out by the trading members connected to them. The onus for settling the trade would be thus on the PCM and
not the trading member.
National Securities Clearing Corporation (NSCCL) will kick off its stock lending operations on NSE screens on
Wednesday. This in effect would be the beginning of the first real stock lending operation in the country after
Securities and Exchange Board of India (Sebi) cleared introduction of the mechanism about two years ago.
Stock Holding Corporation of India (SCHIL), Deutsche Bank and Reliance Capital, the other three stock lending
intermediaries registered with Sebi, are yet to streamline their stock lending mechanism into a commercially viable
system.
Under the NSCCL system only dematerialized stocks are eligible for stock lending. To begin with, the lending and
the borrowing facilities will be limited to 20 stocks eligible for compulsory demat trading. They include pivotal like
State Bank of India and Bajaj Auto and the software favorites NIIT and Infosys Technologies.
The advantage of NSCCL's stock lending proposition is that it is screen based, thus instantly opening up
participation from across the country wherever there is an NSE trading terminal. The risk is also eliminated as the
transactions are guaranteed by the NSCCL and the participating members are the clearing members of NSCCL.
Christened Automated Lending & Borrowing Mechanism (ALBM), the lending/borrowing session will be conducted
every Wednesday on NSE screen, where borrower and lender enter their requirement either as a purchase order,
indicating an intention to borrow or as sale, indicating intention to lend.
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Previous day's closing price of a security will be taken as the lending price of the security. The fee or interest that a
lender gets will be market determined and will be the difference between the lending price and the price arrived at
the ALBM session. Typically the ALBM session will be held on Wednesdays and the securities lending/borrowing
will be given effect on Monday, enabling a clearing member to complete the securities pay-in on Tuesday for which
he has borrowed the securities in the ALB session. The borrower's and lender's clearing account will be debited or
credited on Mondays following the Wednesday's ALBM session.
Funds towards each borrowing will have to be paid in on the securities lending day. A participant will be required to
pay-in funds equal to the total value of the securities borrowed. Similarly, a participant will receive funds payout
equal to the total value of the securities lent.
NSCCL is also planning to open a lending scheme to bridge the delivery gap for securities entering compulsory
demat segment called `demat shares for physical'. If a client of a clearing member has only physical securities to
deliver, the clearing member may seek to borrow demat shares against the physical securities from NSCCL to
complete the pay-in subject to adequate collateral etc. These physical shares will then be dematerialized and returned
to the lender as the return of the securities loaned.

4.3.CLEARING & SETTLEMENT (SLBS)

Participant Eligibility
All Clearing members of NSCCL including Banks and Custodians referred to as Participant are eligible to
participate in SLBS. In order to participate in SLBS, clearing members have to register as Participants in SLBS.
For this purpose, the eligible persons are required to follow the registration procedure as specified by NSCCL which
includes entering into an agreement with NSCCL as per the format specified.
Participants desirous of lending or borrowing securities can do so either on their own account or on behalf of their
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clients. Prior to undertaking lending or borrowing of securities on account of clients, the Participants are required to
enter into an agreement with each client as per the format specified by NSCCL.
The Participant need to apply to NSCCL for allotment of a Unique client ID for each client with whom they have
entered into the agreement for participating in SLBS.
The formats of Agreement between NSCCL & Participant and Participant & Client along with the procedure of UCI
allotment to clients is available in SLB Circular NSE/CMPT/10164 dated January 30, 2008.
SLBS Participants
Custodians
Participants (Trading Members)

Eligible Securities
Securities Available for Borrow / Lending
Currently, securities available for trading in F&O segment of National Stock Exchange of India Ltd. (NSEIL) are
permitted.
Securities lending and borrowing is permitted in dematerialized form only.
Securities in which there are corporate actions are subject to either foreclosure of transactions or adjustment
depending on the type of corporate action.
The eligible securities for early recall/repayment are announced by NSCCL along with the list of eligible securities
for SLB.
Period of lending
The tenure of lending and borrowing ranges from 1 month up to a maximum period of 12 months.
Accordingly the return of securities by borrower is scheduled on the respective reverse leg settlement day. Each
reverse leg settlement date is assigned a specific series number.
Early Recall facility for the Lender
In case the lender wants to recall the securities he has a facility to place a RECALL order on the order matching
platform. The relend order should be for same series/security and for the same client. The lending fee for the balance
period is at market determined rates hence the lender needs to quote the lending fee he wishes to forego for the
balance period. The RECALL order can also be placed at market order.
The lender can only enter a RECALL request if he has existing reverse leg positions. The recall request can be made
for partial quantity.

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In case the early recall transaction is for a custodial participant, the custodian transaction has to be confirmed as per
existing procedure for custodial transactions.
Early Repayment facility for the Borrower
In case the borrower wants to repay the securities and further relend them, a facility to place a REPAY order is
provided on the order matching platform. The relend order should be for same series/security and for the same client.
The lending fee for the balance period is at market determined rates hence the borrower needs to quote the lending
fee he expects for the balance period. The RECALL order can also be placed at market order. In case the early
repayment transaction is for a custodial participant, the custodian transaction will be automatically confirmed by
NSCCL and the securities transferred in NSCCL repayment account will be automatically utilized. Before the market
places a REPAY order, the borrower has to first make an early repayment of securities in the repayment account
prescribed by NSCCL. The procedure for transfer of securities is attached as Annexure.
Clearing:
All obligations are on a gross basis i.e. there is no netting of transactions. Where the participants have transacted for
their client or on their own account the obligation arising out of such transactions will be on the Participant.
However, where participants have transacted for a Custodial Participant (CP) client the transaction is subject to
confirmation of the respective custodian and the obligation will be on the Custodians. However, non-confirmation of
such transactions by the Custodian will revert the transaction to the participants obligation. Obligations for the first
leg are downloaded to participants/Custodians on the T day and obligations for the reverse leg are downloaded on
T+1 day.
The first leg of the transactions across all series including early recall/repayment transactions are settled on T+1 day
on a gross basis.
Transactions under SLBS segment are identified based on different settlement types as intimated by NSCCL for the
first leg and reverse leg settlements. Early recall and repayment transactions will be identified by separate settlement
types in the obligation file.
Early recall transactions would require custodial confirmation whereas early repayment transactions will be
automatically confirmed by NSCCL.
Lenders Obligation : The lenders obligation is the securities lent on T day (Transaction date). The lender is
required to deliver the securities by the scheduled time on T+1 day.
Early Recall Obligation: In case of early recall the lenders obligation is the lending fee which is transacted for the
early recall transaction and is payable on T+1 day.
Borrowers Obligation : Borrowers obligation is the lending fees in cash form and the lending price (T-1 day
closing price in the underlying security) in cash collaterals payable on T+1 day.
Early Repayment Obligation: The securities transferred by the borrower shall be automatically utilised toward the
respective pay-in.
Settlement Procedure:
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The pay-in and pay-out of funds and securities is through the designated bank accounts and securities settlement
account respectively. Transactions are settled on a T+1 day basis for the First Leg, Recall request & early repayment
for all eligible series. Transactions are settled on reverse leg settlement date of the respective series.
Designated Bank Account
The bank account currently used by Participant for settlement of funds in the Capital Market segment is the
designated bank account for giving effect to funds debits/credits under SLBS.
Securities Settlement Account
Participants are required to maintain accounts with both depositories i.e NSDL & CDSL. The pool account currently
used by Participants in NSDL for effecting securities pay-in and pay-out in the Capital Market segment is used for
settlement under SLBS.
In case of CDSL, Participants are required to open a separate settlement account for effecting securities pay-in and
pay-out under SLBS.
Client direct payout facility
Participants / Custodians have been provided the facility of crediting the payout of securities directly to clients
account. In order to avail of this facility, participant/custodian are required to provide a file in the specified file
format available in SLB Circular (NSE/CMPT/10134) containing details of the beneficiary accounts to which direct
credit is to be given.
Process of return of securities
The borrowing Participants are required to return the securities borrowed on reverse leg settlement date of the
respective series. The securities are returned to the lender of the securities by NSCCL on respective reverse leg
settlement date of the series. In the case of borrower failing to return securities, NSCCL conducts an auction for
obtaining securities. In the event of failure to procure securities in auction the transactions are financially closed-out
on the basis of the close-out computation formula.
Shortages and Close out
In the event of funds shortage by the borrower, the SLBS transactions are cancelled and the securities returned to the
lenders along with lending fees.
In the event the lender fails to deliver securities, the transaction is closed out as per the below procedure.
Higher of:

25% of closing price of the security on T+1 day (closing price for the security in the capital market segment
of NSEIL), or

(Maximum trade price of the security in the capital market segment of NSEIL from T to T+1 day) - (T+1 day
closing price of the security in capital market segment of NSEIL)

In the event the borrower fails to return the securities NSCCL conducts a buy-in auction in the Capital Market
segment of NSEIL.
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In the event of no offer in buy in auction/ failure to give delivery for offer in auction market on the settlement date,
the transaction is closed out as per the below procedure.
Higher of:

The maximum traded price in the Capital Market segment of NSEIL from (reverse leg settlement date
1day) to reverse leg settlement date, or

25% above the closing price of the security in the capital market segment on the reverse leg settlement date.

In all cases of shortages, NSCCL may initiate various actions including withdrawal of access to the order matching
platform, withhold of the securities/funds pay-out due to the Participant or any other action as may be intimated by
NSCCL.

Adjustment for Corporate Actions

All transactions in case of corporate actions other than dividend and Stock spilt will be foreclosed 2 days prior to exdate.
No Recall and Repay transaction is allowed in case of shorter tenure loans.
In case of dividend, the dividend amount will be collected from the borrower by NSCCL and will be paid to the
lender.
In case of stock split, the position of the borrower would be proportionately adjusted and the lender will receive the
revised quantity on the reverse leg settlement date.
Adjustment of lending fees in case of foreclosure
In case of corporate actions (other than Stock split & Dividend) all existing positions in SLBS are foreclosed two
days prior to the Ex Date. The lenders are required to repay proportionate amount of lending fees received from
borrowers. The lending fees for the balance period shall be collected on pro rata basis from the lenders based on the
lending fees received by them. The amount so collected shall be passed on to the borrowers in the ratio of their
contribution to the pro rata lending fees receivable by them based on the lending fees paid by them. The lending fee
will be brought by the lender on the foreclosure settlement date and will be passed on to the borrower.
However in case of foreclosure where the corporate action is announced upfront by NSCCL before the transaction
has been executed there will be no adjustment of lending fee. Market participants shall accordingly quote lending fee
for the shorter transaction cycle.
Clearing & Settlement (Derivatives)
National Securities Clearing Corporation Limited (NSCCL) is the clearing and settlement agency for all deals
executed on the Derivatives (Futures & Options) segment. NSCCL acts as legal counter-party to all deals on NSE's
F&O segment and guarantees settlement.
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A Clearing Member (CM) of NSCCL has the responsibility of clearing and settlement of all deals executed by
Trading Members (TM) on NSE, who clear and settle such deals through them.
Clearing & Settlement (Equities)
NSCCL carries out clearing and settlement functions as per the settlement cycles provided in the settlement schedule.
The clearing function of the clearing corporation is designed to work out a) what members are due to deliver and b)
what members are due to receive on the settlement date. Settlement is a two way process which involves transfer of
funds and securities on the settlement date.
NSCCL has also devised mechanism to handle various exceptional situations like security shortages, bad delivery,
company objections, auction settlement etc.
Clearing & Settlement (Currency Derivatives)
National Securities Clearing Corporation Limited (NSCCL) is the clearing and settlement agency for all deals
executed on the Currency Derivatives segment. NSCCL acts as legal counter-party to all deals on NSE's Currency
Derivatives segment and guarantees settlement.
A Clearing Member (CM) of NSCCL has the responsibility of clearing and settlement of all deals executed by
Trading Members (TM) on NSE, who clear and settle such deals through them.

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NSCCL WINS THE ASIAN BANKER AWARD FOR CLEARING HOUSE OF THE YEAR
Securities Clearing Corporation introduced significant service innovations in 2009.
Rigorous selection process chaired by David Eldon, Chairman, Board of
Directors, Dubai International Financial Centre Authority and former Chairman of
HSBC Asia Pacific.
International jury uses comprehensive selection criteria.
The Asian Banker Achievement awards for Markets and Exchanges were announced April 19 in a ceremony in
Singapore. An exclusive audience of top industry leaders from around the world witnessed the award ceremony for
52 of the top professionals and organisations in the financial industry and markets & exchanges industry in the Asia
Pacific region.
This is the highest award programme of its kind for individual and institutional achievement in the financial industry
and markets and exchanges industry in the Asia Pacific region today.
The achievement awards programme for MARKET and exchanges takes the idea of business excellence in financial
markets and exchanges very seriously. Here we look at various aspects of these companies, including profitability,
innovativeness, client support, new product development, and assess their performance relative to peers in the entire
Asia Pacific region. says Yi Yuandong,Research Managing of The Asian Banker. The winners of this years award
have truly outperformed their peers in the region whom we have studied; their institutions and customers have
benefited as a result.
An audience of top industry leaders from around the world witnessed the awards ceremony for 18 of the top
chairmen, CEOs and industry leaders. Among the honoured guests were Neel Kashkari, former Assistant Secretary,
US Treasury and head of the TARP Programme, Ronald Arculli, Chairman, Hong Kong Exchanges and Clearing,
David Conner, Vice Chairman and CEO, OCBC, Han Mingzhi, Director General, China Banking Regulatory
Commission, China, David Eldon, Chairman, Dubai International Financial Centre and Chairman, The Asian Banker
Summit Advisory Council, Cesar Virata, Vice Chairman, RCBC Bank, the Philippines, and Banthoon Lamsam,
Chairman and CEO, Kasikornbank, Thailand.
The award ceremony was held in conjunction with The Asian Banker Summit, the largest gathering of financial
services industry professionals in the Asia-Pacific region. The Summit is held annually in different Asian cities, and
this years was held in Singapore with the full support of the Monetary Authority of Singapore and the Association of
Banks of Singapore.
Among the key speakers at the event are Neel Kashkari, sgeir Jnsson, Chief Economist, Arion Bank and author of
the book Why Iceland?, Heng Swee Keat, Managing Director, Monetary Authority of Singapore, David Eldon,
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former Chairman of The Hongkong and Shanghai Bank and currently the Senior Advisor of
PricewaterhouseCoopers, and Wee Ee Cheong, Deputy Chairman and Chief Executive Officer, UOB, and Chairman
of The Association of Banks in Singapore.
Securities Clearing Corporation introduced significant service innovations in 2009.
The National Securities Clearing Corporation is a wholly-owned subsidiary of National STOCK Exchange of India
and it was the first clearing corporation in the country to provide innovation/settlement guarantees that
revolutionized the entire concept of settlement system in India.
The National Securities Clearing Corporation is a dominant player in its MARKET. In 2009, it had a market share of
75% in equity clearing, 100% in equity derivatives clearing, and 50% in CURRENCY derivatives clearing.
The cross margining mechanism across equity and equity derivatives segments that The National Securities Clearing
Corporation implemented in 2009 brought significant benefits to investors. As a result of the implementation, the
margin requirements for offsetting positions were reduced by 75% of the total margin requirement in the respective
segment and therefore investors TRADING capability increased.

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5.MINIMUM BASE CAPITAL SECURITIES

Clearing Members are permitted to deposit equity shares of approved companies, inelectronic form ('demat
securities') in the designated depository accounts maintained by the Custodians (HDFC Bank Ltd. / STOCK Holding
Corporation of India Ltd. (SHCIL)) towards base minimum capital. These securities are required to be pledged in
favour of National Securities Clearing Corporation Limited.
The securities would be subject to a minimum margin of 15% on Nifty securities, and a minimum margin of 30%
margin on other securities or such other margin percentage as may be decided by NSCCL from time to time.
NSCCL may revise the list of approved securities and the margins (haircuts) from time to time. Such changes would
be notified to the clearing members.
Members who have deposited securities which have been discontinued from the list of approved securities, would be
required to replace such securities within such time as specified by NSCCL.
Ownership of Securities
The securities deposited, would be subject to the legal and beneficial ownership of the clearing member/ spouse, any
of the partners/ their spouses or any of the directors, in case of individual, partnership or corporate clearing members
respectively, as the sole/ first joint holder, provided no depositor of securities is a minor as on the date of deposit
thereof.
In case of reconstitution / restructuring or any change in the partners /directors of the clearing member, as applicable,
the clearing member would be required to replace the securities belonging to such outgoing partners /directors
immediately and no benefit will be given by NSCCL for such securities towards base minimum capital.
Securities not approved for acceptance
The following securities are not accepted by NSCCL:
a) Partly paid securities
b) Securities subject to any lock in period, buy back scheme, any charge or lien, encumberance of any kind, or such
other limitations or title is questioned before the court or any regulatory body.
Marking of pledge
Clearing members providing demat securities would be required to mark a pledge of the securities in favour of
NSCCL. In addition to any documents required by the authorised Custodian, the following documents are required to
be provided to the authorised Custodian :
i. Deed of Pledge is to be executed as per specified format available with the authorised Custodian on a non-judicial
stamp paper of the prescribed amount as applicable to an agreement of Deed of Pledge in the particular State in
which it is executed.
In case the Deed of Pledge is executed outside the State of Maharashtra, the stamp duty payable in that particular
State shall be payable, at the time of execution, and the Deed of Pledge shall be stamped for the differential amount
within three months of its first receipt in the State of Maharashtra. The differential amount of stamp duty payable on
such instrument shall be the amount of stamp duty in the State of Maharashtra, less the amount of stamp duty, if any,
already paid under any law in force in India, when it was executed.
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ii. Certified true copy of the relevant Board Resolution in case of Corporates in this regard.
Clearing members would give the necessary pledge instruction(s) to the Custodian for the securities to be pledged in
favour of NSCCL. Once the securities are accepted and duly pledged by the Custodian, the Custodian shall inform
NSCCL the value of the securities after adjusting the relevant margin percentages. On the basis of the Custodian's
advice, benefit towards Base Minimum Capital would be provided to the member.
Valuation
Valuation of securities would be done by the Custodians at regular intervals as specified by NSCCL.
The value of securities deposited would be reckoned at the last closing price/rate as being provided by National
Securities Depository Ltd. (NSDL) to the Custodian prior to the date of deposit.
Valuation for this purpose will be done on the basis of the rates at the NSE or in the event of the securities not
being TRADED in NSE, the rates at The STOCK Exchange, Mumbai (BSE). In case a security is not TRADED in
either of these stock exchanges on the date of valuation , the last traded price at NSE and failing which the last traded
price at BSE, would be reckoned for this purpose. However, in case any security has not been traded during the six
months preceding the date of valuation, the same will be excluded for the purpose of valuation. In case of securities
subject to call or put option, the valuation shall be done on the basis of exercise price or last traded price on the
valuation date, whichever is lower.
The above valuation would be reduced by the relevant margin percentage to arrive at the collateral value of the
security. Only the value net of margins (hereinafter referred to as net value) would be considered as the value of the
security deposit.
Where the entire non-cash deposit of a member comprises only of securities, the benefit provided to such clearing
member would be only to the extent of valuation of securities as provided by the Custodian, or as applicable as per
Base Minimum Capital requirement, whichever is lower.
Monitoring of total value of securities
Clearing members are required to ensure that the value of securities deposited, net of margin, does not fall below the
required minimum value for which benefit towards Base Minimum Capital is provided to him/ them.
To ensure continued compliance, clearing members may deposit additional securities whenever required. However in
case of any shortfall in the value of the securities, the clearing members are required to replenish such shortfall
immediately or within such time as stipulated by NSCCL.
In case it is not possible for the clearing member to immediately deposit fresh securities to cover the value of the
shortfall as required above, he may deposit cash/ FDRs/ bank guarantees to the extent of the shortfall amount.
Release of securities deposited (Cancellation of pledge)
Clearing members may from time to time, withdraw, replace or make fresh deposits of securities to the custodians
subject to maintenance of the required minimum value of securities towards Base Minimum Capital.
NSCCL would consider such request provided such clearing member has no outstanding obligations/positions/dues
towards NSCCL, there is no other liability under the Rules, Byelaws and Regulations and if NSCCL is of the opinion
that such release does not entail any risk.
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A clearing member camn make a requisition to NSCCL for withdrawal of specific securities provided that pursuant
to withdrawal of the specified securities, the security deposit must be greater than the minimum requirement of
security deposit by 10% of the post withdrawal value of securities as on the date of withdrawal.
On receipt of request from a clearing member relating to withdrawal of securities, NSCCL may in accordance with
the provisions detailed above, instruct the authorised Custodian to release such specific securities. The Custodian
then cancels the pledge marked in favour of NSCCL and release such securities to the clearing member.
Custodian charges
The charges to be levied by Custodians for the above services relating to deposit of securities and the manner in
which the payments are to be made will be as specified by the respective Depository Participants/Custodian.
Clearing members are required to pay the Custodian, by a cheque/ demand draft drawn in favour of the Custodian.
The clearing members must pay the bills raised by the Custodian within 15 days of receipt of such bills. In case such
bills are not paid within the period stipulated, appropriate action as may be decided by the relevant authority from
time to time may be initiated against the concerned clearing member.

6.PARTICIPANT REGISTRATION

1.1 Eligibility
All the entities (participants) desirous of settling trades in corporate bonds through NSCCL shall register with
NSCCL. These entities inter-alia include those specified in the SEBI circular for mandatory clearing and settlement
of corporate bond trades through the Clearing Corporation viz., mutual funds, foreign institutional investors/ subaccounts, venture capital funds, foreign venture capital investors, portfolio mangers, and RBI regulated entities as
specified by RBI. Entities carrying out settlement on behalf of participants shall also be registered as participants.
1.2 Registration Procedure
All entities desirous of carrying out clearing and settlement of trades in corporate bonds through NSCCL shall be
required to submit following documents as a part of registration procedure:
Agreement
Participants carrying out clearing and settlement for themselves to execute the Corporate Bond Settlement
Agreement as per format specified in Annexure I.
Participants carrying out clearing and settlement on behalf of other participants i.e., custodians to execute the
Corporate Bond Settlement Agreement as per format specified in Annexure II.
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NSCCL

The agreement shall be required to be executed on Rs.100 franked document and signed and stamped on all pages.
Submission of account details Participants shall also submit the details of their bank and DP account, through which
the pay-in and payout shall be done, to the Clearing Corporation in the specified format as per Annexure III.
Application for FIMMDA platform Participants desirous of availing the facility of viewing online status of
transactions, receiving online alerts, messages etc may submit the application form for the FIMMDA platform. The
platform may be used by the participants for reporting trades in corporate bonds and marking the trades for clearing
& settlement by NSCCL
1.3 Activation by NSCCL
On submission of necessary documents as per 1.2 above, the participants / custodians, shall be provided login id and
password for login in the FIMMDA platform for reporting and clearing and settlement. Entities that have signed the
undertaking and provided bank and depository account details as enumerated in 1.2 above shall be provided the
details of NSCCLs Bank Account and Depository Account which shall be used for carrying out settlements. All the
registered participants shall be eligible to carry out clearing & settlement of Corporate Bond trades through NSCCL.

6.1SETTLEMENT PROCEDURE
1 Settlement of Corporate Bond Transactions
All trades in corporate bonds available in demat form which are reported on any of the platforms provided by NSE
viz., FIMMDA, NSE-WDM and NSE web site shall be eligible for settlement through NSCCL. In order to facilitate
settlement of corporate bond trades through NSCCL, both buy and sell participants shall be required to explicitly
express their intention to settle the corporate bond trades through NSCCL. Where trades are reported on the
FIMMDA reporting platform the participants can directly express their intent to settle on the platform in the clear &
settle screen. The trades will be settled at participant level on DVP I basis i.e., on gross basis for securities and funds.
The settlements shall be carried out through the bank and DP accounts specified by the participants.
On the settlement date, during the pay-in, participants shall be required to transfer the securities to the Depository
account specified by NSCCL and transfer the funds to the bank account specified by NSCCL within the stipulated
cut-off time.
On successful completion of pay-in of both securities and funds, the securities / funds shall be transferred by NSCCL
to the depository / bank account of the counter-party.

2 Custodian Trades
The participants desirous of clearing and settling the trade through a custodian may do so by specifying the custodian
details. Custodian may be specified either for a participant wherein all the trades for such participant shall be eligible
for settlement by custodian or for a trade wherein only that trade shall be eligible for settlement by custodian.
In order to facilitate settlement of trades identified for settlement by custodian, through NSCCL, the custodian shall
be required to explicitly express its intention to settle such trades through NSCCL. The settlement of trade in such
case shall take place through the custodians bank and DP account as specified by the custodian.
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3 Failure of Settlement Obligation of Corporate Bond Transactions

If either of the participants / custodians fails to honor their pay-in obligation, either fully
or partially, by stipulated time then the transaction shall be cancelled and shall not be
considered for settlement. Further the securities / funds received towards the pay-in
obligation shall be returned back to the respective participants / custodians.
7.GLOBAL CLEARANCE NETWORK SERVICE

The Corporation may establish a foreign clearing, settlement and custody service in conjunction with banks, trust
companies and other entities to be known as the Global Clearance Network Service and may provide such service to
any Member which is qualified to be a customer of the bank, trust company or other entity and has executed such
agreement with the Corporation as the Corporation may require providing, among other things, a guarantee to the
bank, trust company or other entity for the services. The Corporation may from time to time establish procedures for
the operation of the service.
National Securities Clearing Corporation Limited provides clearing and settlement of the trades
executed in the equities and derivatives segments of National Stock Exchange (NSE). The company
was incorporated in 1995 and is based in Mumbai, Maharashtra. National Securities Clearing Corporation
Limited operates as a subsidiary of National Stock Exchange of India Ltd.

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GRANT OF RECOGNITION TO NATIONAL SECURITIES CLEARING CORPORATION

LTD.

SEBI has granted recognition to National Securities Clearing Corporation Ltd. (NSCCL) for a period of one year
commencing on the 3rd day of October, 2014 and ending on the 2nd day of October, 2015 subject to compliance
with conditions which include:
1- NSCCL shall appoint compliance officer exclusively for the Clearing Corporation.
2- NSCCL shall take immediate steps to rectify the deficiencies pointed out in the systems audit.
The grant of recognition has been notified in the Gazette of India.

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CONCLUSION

National Securities Clearing Corporation Ltd. (NSCCL)may establish more than one clearing segment as may be
specified by the relevant authority from time to time. Deals which may be admitted to the different clearing segments
for the purpose of clearing and settlement will be specified by the relevant authority from time to time.
National Securities Clearing Corporation (NSCCL) will kick off its stock lending operations on NSE screens on
Wednesday. This in effect would be the beginning of the first real stock lending operation in the country after
Securities and Exchange Board of India (Sebi) cleared introduction of the mechanism about two years ago.
The advantage of NSCCL's stock lending proposition is that it is screen based, thus instantly opening upparticipation
from across the country wherever there is an NSE trading terminal. The risk is also eliminated as the transactions are
guaranteed by the NSCCL and the participating members are the clearing members of NSCCL.
NSCCL would consider such request provided such clearing member has no outstanding obligations/positions/dues
towards NSCCL, there is no other liability under the Rules, Byelaws and Regulations and if NSCCL is of the opinion
that such release does not entail any risk.

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