Handling of Securities Shortage in Physical settlement

Securities settlement:

i) Failure of the seller to deliver securities shall result in buy-in auction for the shares by Clearing Corporation as per auction schedule declared periodically. Currently auction shall be conducted on Expiry+1 day and settled on Expiry+2 days. The auction amount shall be charged to the short delivering clients. Failure to procure shares in auction shall be closed out. Auction for shortages shall be conducted in Capital Market Segment of the Exchange under a separate series. Pay-in and payout for auction settlement shall be as per the schedule declared by Clearing Corporation.  

ii) Client who fail to deliver the pay-in shall be debited by an amount of 150% of value of the securities not delivered valued. 

iii)  When the Clearing Corporation is satisfied that securities cannot be bought in auction, obligation in such security shall be deemed to be closed out. When the auction seller fails to deliver in part or full on auction pay-in day, the same shall be closed out


  1. Auction shall not be conducted for shortages in the securities which are under corporate actions. Such shortages shall be closed out directly.
  2. Close out shall be at the closeout price of the security as determined in Capital Market Segment.
  3. Clients failing to fulfil their securities deliverable obligations to Clearing Corporation shall be subjected to a penalty charge of 0.05% per day. 

Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select atleast one of the reasons
CAPTCHA verification is required.

Feedback sent

We appreciate your effort and will try to fix the article

Still need help?

Create Ticket