Chaitali Maskar Raksha Gavli Hardik Shah Kailash Masye Sachchit C.K.

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For all trades executed on a given day, it is important to determine the obligations standing at the end of the day against parties to trade. This process of ascertaining obligations is known as clearing, and the process of meeting or discharging these obligations is known as settlement.

Established in 1973, The Depository Trust Company (DTC) was created to alleviate the rising volumes of paperwork and the lack of security that developed after rapid growth in the volume of transactions in the U.S. securities industry in the late 1960s. Before DTC and NSCC were formed, brokers physically exchanged certificates, employing hundreds of messengers to carry certificates and checks. The mechanisms brokers used to transfer securities and keep records relied heavily on pen and paper. The exchange of physical stock certificates was difficult, inefficient, and increasingly expensive.

DTCC has been established in 1999 as a holding company to combine The Depository Trust Company (DTC) and National Securities Clearing Corporation (NSCC). It was set up to provide an efficient and safe way for buyers and sellers of securities to make their exchange, and thus "clear and settle" transactions. It also provides custody of securities.

Reducing risk and increasing efficiency in securities clearance and settlement To hold all paper stock certificates in one centralized location, and automate the process by keeping electronic records of all certificates For transferring securities electronically, & eliminating their physical handling for settlement purposes. To relieve brokerage firms work of inspecting, counting, and storing certificates. To bring easiness & increase efficiency, and provide safeguards for investors. To reduce huge time & expense required. Improving the trade confirmation/affirmation process, shortening the time duration required for process

Investors place orders from their trading terminals. Broker houses validate the orders and routes them to the exchange (BSE or NSE depending on the clients choice) Order matching at the exchange. Trade confirmation to the investors through the brokers. Trade details are sent to Clearing Corporation from the Exchange. Clearing Corporation notifies the trade details to clearing Members/Custodians who confirm back. Based on the confirmation, Clearing Corporation determines obligations. Download of obligation and pay-in advice of funds/securities by Clearing Corporation. Clearing Corporation gives instructions to clearing banks to make funds available by pay-in time. Clearing Corporation gives instructions to depositories to make securities available by pay-in-time.

Pay-in of funds: Clearing Corporation advises Clearing Banks to debit account of Custodians/Clearing members and credit its account and clearing bank does the same. Payout of securities: Clearing Corporation advises depository to credit pool accounts of custodians/Clearing members and debit its account and depository does the same. Payout of funds: Clearing Corporation advises Clearing Banks to credit account of custodians/ Clearing members and debits its account and clearing bank does the same. Note: Clearing members for buy order and sell order are different and Clearing Corporation acts as a link here.

Depository informs custodians/Clearing members through Depository Participants about pay-in and pay-out of securities. Clearing Banks inform custodians/Clearing members about pay-in and pay-out of funds. In case of buy order by normal investors clearing members instruct his DP to credit the clients account and debit its account. The money will be debited (Total settled amount - margins paid at the time of trade) from the clients account. In case of sell order by normal investors Clearing members instruct his DP to debit the clients account and credit its account. The money will be credited to the clients account.

NSCCL: Clearing Members Custodians Depository

the first depository in India. was registered on June7, 1996 with SEBI and commenced operations in November 1996. NSDL is a public limited company formed under the Companies Act, 1956 with a paid-up capital of Rs 105 crore. promoted by the Industrial Development Bank of India, Unit Trust of India, National Stock Exchange of India Limited, and State Bank of India

the second depository set up by the Bombay Stock Exchange (BSE) and co-sponsored by the State Bank of India, Bank of India, Bank of Baroda, and HDFC bank. CDSL commenced operations on March 22, 1999

Day T T+1 working days T+1 working day T+2 working day T+2 working day T+2 working day T+3 working day T+4 working day T+5 working day T+6 working day

Type of Activity Trading Clearing

Activity Rolling Settlement Trading Custodial Confirmation Delivery Generation

Settlement

Securities and Funds pay in Securities and Funds pay out Valuation Debit

Post Settlement

Auction Bad Delivery Reporting Auction settlement Rectified bad delivery pay-in and pay-out

Trading through BOLT (BSE Online Trading) System, downloading of statements showing details of transactions and margins at the end of the day. Downloading of provisional securities and funds obligation statements by member-brokers. 6A/7A entry by the member-brokers/ confirmation by the custodians.
Day Activity T

6A/7A: A mechanism whereby the obligation of settling the transactions done by a member-broker on behalf of a client is passed on to a custodian based on confirmation of latter. The custodian can confirm the trades done by the memberbrokers on-line and up to 11 a.m. on the nexttrading day. The late confirmation of transactions by the custodian after 11:00 a.m. up to 12:15 p.m., on the next trading day is, however, permitted subject to payment of charges for late confirmation @ 0.01% of the value of trades confirmed or Rs. 10,000/-, whichever is less.

Day Activity T +1

Confirmation of 6A/7A data by the Custodians up to 11:00 a.m. Downloading of final securities and funds obligation statements by members. T+2 - Pay-in of funds and securities by 11:00 a.m. and pay-out of funds and securities by 1:30 p.m. The member-brokers are required to submit the pay-in instructions for funds and securities to banks and depositories respectively by 10: 30 a.m. Auction on BOLT at 11.00 a.m.

Day Activity T +2

Day Activity T +3

Day Activity T +4

Auction pay-in and pay-out of funds and securities by 12:00 noon and 1:30 p.m. respectively.
Confirmation of 6A/7A data by the Custodians up to 11:00 a.m. Downloading of final securities and funds obligation statements by members.

Day Activity T +1

Legal risk Presettlement risk-Trade confirmation. Settlement cycles. Central counterparties. Securities lending. Settlement risk Operational risk Custody risk
Protection of customers' securities

The prompt and accurate clearance and settlement of securities transactions, including the transfer record of ownership and the safeguarding of securities for the protection of investors.
New data processing and communications techniques create the opportunity for more efficient, effective, and safe procedures for clearance and settlement. Decreases in the costs and risks of clearing and settling securities for all parties or investors processing the securities.

The linking of all clearance and settlement facilities and the development of uniform standards and procedures for clearance and settlement. Entities holding securities in custody should employ accounting practices and safekeeping procedures that fully protect customers securities.
Faster process, easy & quick trade completion. Data recorded in electronic form provides safe & reliable system.

www.bseindia.com www.nseindia.com www.monecontrol.com www.bis.org www.sec.gov.in www.moneyterms.com www.wikipedia.com www.investopedia.com www.sebi.gov.in www.trendwatch.com

Kinds of Mutual fund Schemes

Schemes Based on Structure

Schemes Based On Investment Objective

Other Schemes

Debt Funds Open-Ended Schemes

Equity Funds

Balanced Funds Tax Saving Scheme

Guilt Funds Close-Ended Schemes

Index Funds Sector Specific

Dividend yield Income Funds Exchange Traded Funds Equity Diversified MIPS Fund of Funds Thematic Funds Liquid Funds Commodity Funds FMPs Sector Funds

Interval Schemes

Real Estate Funds Floating Funds ELSS

TRUSTEE

CUSTODIAN

AUDITOR

COLLECTING BANKERS

SPONSOR

AMC

RTA

FUND
ACCOUNTANTS

Kinds of Mutual fund Schemes

Schemes Based on Structure

Schemes Based On Investment Objective

Other Schemes

Schemes Based on Structure

Schemes Based On Investment Objective

Other Schemes