Trading system in india
Clearing corporation is one of the major participants involved in clearing and settlement process in stock market. It is also in charge of risk management and is obligated for meeting all settlement regardless of the member defaults. They are another participant in the clearing and settlement process in Indian stock market.
When trading members place deals in the stock exchange, the same is moved to NSCCL, which transfers them to the clearing members.
India in the World Trading System
The clearing member is in charge of determining the position of share to suit the trade. Clearing banks are responsible for the settlement of funds. There are 13 clearing banks, and each clearing member needs to open a clearing account with either one of them. In case of a pay-out, clearing members receive funds in the clearing account and in case of pay-in they need to make funds available. These two depositories hold your Demat account, and clearing members also need to maintain a clearing pool account with them.
Clearing members need to transfer the securities to the clearing pool account they hold with the depositories on the date of settlement. However, note that they are not allowed to trade, and they can only clear and settle trades executed for their clients. Professional clearing members generally constitute banks, custodians, etc.
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A trade in the stock market takes place in an instant. But for that to happen smoothly and efficiently, all these processes take place in the background.
And knowing the whole process may help you understand how the stock market works better. The buy and sell orders for this stock are as follows: Here the costliest buy prices are matched against the cheapest available sell prices, and whenever the buy price is less than or equal to the best available sell price a match is done.
Clearing Once two orders match and a trade is executed, the clearing process takes place.
For example, imagine that there are two traders: Ramesh and Suresh. Settlement The next step is to fulfil the financial obligations identified in the clearing step. Participants Involved in the Process Clearing Corporation Clearing corporation is one of the major participants involved in clearing and settlement process in stock market.
Clearing banks Clearing banks are responsible for the settlement of funds. Previous Article Next Article. Rate this article.
Stock Market Terminology: A Beginner’s Guide To Stock Trading
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