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FAQs - Trading/Settlement

1. What is the procedure for selling dematerialised securities?
The procedure for selling dematerialised securities is very simple. After you have sold the securities, you would instruct your DP to debit your account with the number of securities sold by you and credit your broker's clearing account. This delivery instruction has to be given to your DP using the delivery instruction slips given to you by DP at the time of opening the account. Procedure for selling securities is given here below:

  • You sell securities in any of the stock exchanges linked to NSDL through a broker.

  • You gives instruction to DP to debit his account and credit the broker's [clearing member pool] account.

  • Before the pay-in day, your broker gives instruction to DP for delivery to clearing corporation.

  • Your broker receives payment from the stock exchange [clearing corporation]

  • You receive payment from the broker for the sale of securities.

2. How can I purchase dematerialised securities?
For receiving demat securities you may give a one-time standing instruction to your DP. This standing instruction can be given at the time of account opening or later. You may also choose to give separate receipt instruction every time some securities are to be received.

The transactions relating to purchase of securities are summarised below:

  • You purchase securities through a broker

  • You make payment to your broker who arranges payment to clearing corporation on the pay-in day

  • Your broker receives credit of securities in clearing account on the pay-out day

  • Your broker gives instructions to DP to debit clearing account and credit your account

  • You receive shares into its account. However, if standing instructions are not given at the time of opening the account, you will have to give 'Receipt Instructions' to your DP for receiving credit

You should ensure that your broker transfers the securities purchased from his clearing account to your depository account, before the book closure. If the securities remain in the clearing account of the broker, the company may give corporate benefits to the broker. In that case, you have to collect benefits from your broker.

3. What do you mean by 'Market Trades' and 'Off Market Trades'?
Any trade settled through a clearing corporation is termed as the 'Market Trade'. These trades are done through stock brokers on a stock exchange. 'Off Market Trade' is one which is settled directly between two parties without the involvement of clearing corporation. The same delivery instruction slip can be used either for market trade or off-market trade by ticking one of the two options.

4. If I sell securities through a sub-broker which part of the delivery instruction slip has to be filled?
If you are delivering securities to your sub-broker you would need to fill-in the off-market trade portion of the delivery instruction slip.

5. What settlement details are required on the delivery instruction slip and when delivery is to be given to a broker?
On every stock exchange various settlements are effected every day such as weekly settlement, daily settlement, auction settlement etc. Each of these settlements is identified by the combination of the market type and the settlement number. You are required to mention the appropriate settlement details on the delivery instruction slip while transferring the shares to your broker's account. These settlement details are available on the contract note issued by the broker.

6. How do I come to know about the settlement deadlines?
The depository participant with whom you have your demat account will prescribe the deadlines to be followed by you for submission of delivery instruction slips. You should deliver instructions to your DP as per these deadlines.

7. When I buy shares, in what time should I receive the securities from my broker?
The broker is expected to transfer the securities to you within two working days or four calendar days after securities are received in his pool account, provided you have made the requisite payment to the broker.

8. What precautions do I need to observe with respect to Delivery Instruction Slips [DIS]?
The following precautions are to be taken:

  • Ensure and insist with your DP to issue DIS book; do not use loose slips.

  • Ensure that DIS numbers are pre-printed and DP takes acknowledgment from you for the DIS booklet issued to you.

  • Ensure that your account number [client id] is pre-stamped.

  • If your account is a joint account, all the joint holders have to sign the instruction slips. Instruction cannot be executed if all joint holders have not signed.

  • Avoid using loose slips

  • Do not leave signed blank DIS with anyone viz., broker/sub-broker.

  • Keep the DIS book under lock and key when not in use.

  • If only one entry is made in the DIS book, strike out remaining space to prevent misuse by any one.

  • Please fill in target account-id yourself; and all details in the DIS yourself.

9. What is 'execution date' given in the delivery instruction form?
Execution date is the date on which securities will be actually debited from your account. The execution date written on the delivery instruction has to be entered by the DP in the DPM system [computer]. DPM system will record the date and will debit your account only on that date. You may issue the instruction well in advance of the date on which you want the securities to be debited from your account but your account will be debited only on the execution date.

10. What benefit do I get by giving delivery instruction from with a future execution date?
By giving a future dated instruction the risk of non-execution of instruction due to lack of time or last minute rush is covered.

11. What is the importance of record dates to me?
In case the securities bought by you are yet to be transferred into your account by your broker before the book closure / record date, you will not be entitled to receive corporate benefit such as dividend or bonus since your name will not figure in the list of beneficial owners. Hence, you must ensure that securities bought by you are transferred into your account before the book closure / record date announced by the company.

12. Can I buy and sell shares through Depository Participant?
No. Shares can be bought and sold only through a stock broker. DP facilitates delivering the shares against a sell transaction or receiving the shares for a buy transaction.




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