Department / Board : Secondary Market Department
Circular No. : SMDRP/Policy/Cir-05/2001
Date : 01.02.2001
Referred IN
The President/Executive Director/ Managing Director of all the Stock Exchanges/ NSDL/CDSL
Mandatory transfer of securities from CM pool account to beneficiary account
Please refer to SEBI circular no. SMDRP/Policy/Cir-11/99
dated May 7, 1999 advising stock brokers/clearing members to transfer the
securities from their respective CM Pool account to the respective beneficiary
account of their clients within 15 days from the pay-out day of the settlement.
It has now been decided that with effect
from February 12, 2001, clearing member shall be required to transfer the
securities from their respective CM Pool account to the respective
beneficiary account of their clients within 6 calendar days after the
pay-out day, instead of the existing time limit of 15 days.
The securities lying in the pool account
beyond the above period would not be eligible for delivery in the subsequent
settlement(s) and would also not be eligible for pledging or stock lending
purpose, until the same is credited to the beneficiary accounts.
The securities lying in the pool account
beyond 6 calendar days would attract a penalty at the rate of 6 basis point
per week on the value of securities. The penalty so collected by the
depositories shall be credited to a separate account with the depository and
earmarked for defraying the expenses in connection with the investors'
education and awareness programs conducted by the depository.
The securities, which are lying in these
accounts beyond the specified time period, shall initially be identified
based on FIFO (First-In First-Out) basis. However, with effect from March 5,
2001, the securities shall be identified based on the settlement number
basis. The clearing corporation/houses of the stock exchanges shall provide
the settlement-wise details of securities to the depositories and the
depositories shall maintain the settlement-wise records for the purpose.
Further with effect from April 2, 2001,
stock exchanges shall introduce the settlement system for direct delivery of
securities to the investors. Clearing corporation/clearing house (CC/CH)
shall ascertain from each clearing member, the beneficial account details of
their respective clients who are due to receive pay out of securities. Based
on this, the CC/CH shall send pay out instructions to the depositories so
that the client receives pay out of securities directly to the extent of
instructions received from the respective clearing members. To the extent of
instruction not received, the securities shall be credited to the CM pool
account.