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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Settlement Process

In a T+1 settlement, a client's sale of shares is executed, but the broker has not received the securities in its pool account by the pay-in deadline because the client held them in own demat and did not transfer them. Under the SEBI-prescribed framework, which describes the standard way a client can avoid this delivery failure for sale transactions?

The client should authorise the debit of shares before pay-in, through a delivery instruction or the TPIN-based electronic delivery instruction system (eDIS), so the shares reach the clearing member's pool account in time. Deadlines are not extended for individual clients.

  1. AAllow the broker to sell and deliver from the client's own demat later at its discretion
  2. BGive an early pay-in or a delivery instruction, or use an electronic debit authorisation such as TPIN/eDIS, to move the shares before pay-inCorrect
  3. CAsk the exchange to extend the pay-in deadline for that client
  4. DHave the buyer deliver the shares instead

Explanation

Clients must transfer shares to the clearing member's pool account before pay-in, via a delivery instruction, or authorise debit through TPIN-based eDIS. Brokers have no discretion to withdraw shares without authorisation, the exchange does not extend deadlines per client, and the buyer cannot deliver the seller's shares.

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