Compulsory Rolling Settlement All transactions in all groups of securities in the Equity segment and Fixed Incomesecurities listed

on BSE are required to be settled on T+2 basis A T+2 settlement cycle means that the final settlement of transactions done on tradeday between the buyers and sellers respectively takes place on second business dayafter the trade day. (excluding Saturdays, Sundays, bank and Exchange tradingholidays) The settlement calendar, which indicates the dates of the various settlement relatedactivities, is drawn by BSE in advance and is circulated among the market participants. Trades done on a particular day are settled after a given number of business days. Transactions in securities of companies, which are in " Z " group or have been placedunder " trade-to-trade " by BSE as a surveillance measure ( " T " group) , are settled onlyon a gross basis and the facility of netting of buy and sell transactions in such scripsisnot available. The transactions in 'F' group securities representing " Fixed Income Securities " and " G " group representing Government Securities for retail investors are also settled at BSEon T+2 basis.

SETTLEMENTSecurity transactions are settled through electronic delivery facilitated by depositories Presently,thesettlementofalltradesisarollingsettlementonaT+2basis Managed by NSSCCL i.e. National SecuritiesClearing Corporation Ltd. Provides facility for multiple settlementmechanisms. Rolling settlement is on T+5 days

 Settlement through clearing house. NSCCL acts as depository as well as clearing bankto provide Delivery Versus Payment settlement. CLEARING AND

Margins collection from Client Members should have a prudent system of risk management to protect themselves from client default. Margins are likely to be an important element of such asystem. The same should be well documented and be made accessible to the clients and the Stock Exchanges. However, the quantum of these margins and theform and mode of collection are left to the discretion of the members. Margin Shortfall In case of any shortfall in margin: The members shall not be permitted to trade with immediate effect. There is a penalty for margin violationPenalty applicable for margin violation is levied on a monthly basis based on slabs as mentioned below: Instances of DisablementPenalty to be levied 1st instance0.07% per day2nd to 5th instance of disablement0.07% per day +Rs.5000/- per instance from 2nd to 5th instance6th to 10th instance of disablement0.07% per day+ Rs. 20000 ( for 2nd to 5th instance) +Rs.10000/- per instance from 6th to 10th instance11th instance onwards0.07% per day +Rs. 70,000/- (for 2nd to 10th instance) +Rs.10000/- per instance from 11th instance onwards. Additionally, themember will be referred to the Disciplinary Action Committee for suitable actionInstances as mentioned above shall refer to all disablements during market hours in a calendar month. The penal charge of 0.07% per day shall is applicable onall disablements due to margin violation anytime during the day. Liquid assets Members are required to provide liquid assets which adequately cover various margins andSecurity Deposit requirements. A member may deposit liquid assets in the form of cash, bank guarantees, fixed deposit receipts,approved securities and any other form of collateral as may be prescribed from time to time. The total liquid assets comprise of the cash component and the non cash component wherein the cash component shall be at least 50% of liquid assets.1. Cash Component: a. Cash b. Bank fixed deposits (FDRs)issued by approved banksand deposited withapproved custodians or NSCCL. c. Bank Guarantees (BGs)in favour of NSCCL from approved banksin the specified format. d.Units of money market mutual fund and Gilt funds where applicable haircut is 10%. e. Government Securities and T-Bills2. Non Cash Component: a. Liquid (Group I) Equity Sharesin demat form, as specified by NSCCL from time to time deposited with approved custodians.

b. Mutual fund units other than those listed under cash component decided by NSCCL from time to time deposited with approved custodians. Margins for institutional deals Institutional businesses i.e., transactions done by all institutional investors are margined from T+1 day subsequent to confirmation of the transactions by thecustodians. For this purpose, institutional investors include Foreign Institutional Investors registered with SEBI. (FII) Mutual Funds registered with SEBI. (MF) Public Financial Institutions as defined under Section 4A of the Companies Act, 1956. (DFI) Banks, i.e., a banking company as defined under Section 5(1)(c) of the Banking Regulations Act, 1949. (BNK) Insurance companies registered with IRDA. (INS) Pension Funds registered with PFRDA (PNF) Levy of margins: Institutional transactions are identified by the use of the participant code at the time of order entry. In respect of institutional transactions confirmed by the custodians the margins are levied on the custodians. In respect of institutional transactions rejected/not accepted by the custodians the margins are levied on the members who have executed thetransactions. The margins are computed and levied at a client (Custodial Participant code) level in respect of institutional transactions and collected from thecustodians/members. Retail Professional Clearing Member: In case of transactions which are to be settled by Retail Professional Clearing Members (PCM), all the trades with PCM code are included in the tradingmembers positions till the same are confirmed by the PCM. Margins are collected from respective trading members until confirmation of trades by PCM. On confirmation of trades by PCM, such trades are reduced from the positions of trading member and included in the positions of PCM. The PCMs are thenliable to pay margins on the same. Exemption upon early pay-in of securities In cases where early pay-in of securities is made prior to the securities pay-in, such positions for which early pay-in (EPI) of securities is made are exempt frommargins. Members are required to provide client level early pay-in file in aspecified format.The EPI of securities is allocated to clients having net deliverable position, on a random basis unless specific client details are provided by the member/ custodian. However, member/ custodian shall ensure to pass on appropriateearly pay-in benefit of margin to the relevant clients. Additionally, member/custodian can specify the clients to whom the early pay-in may be allocated. Exemption upon early pay-in of funds In cases where early pay-in of funds is made prior to the funds pay-in, such positions for which early pay-in (EPI) of funds is made shall be exemptfrom margins subject to bank confirmation. Members/Custodians shall make early pay-in funds through a screen-based request in the Collateral Interface for Members (CIM). The facility for making early pay-in of funds will be separate from the facility of allocation of the early pay-in of funds which can be done either

through Screen basedrequest or file upload. Members/Custodians may provide early pay-in of funds from any of their settlement accounts. Early pay in of funds may be allocated at client level or at client-security level. The allocation can be revised through a screen based request or throughthe file upload facility in thespecified format. Members can make early pay-in of funds along with details of client-security allocation before execution of a trade and shall be able to avail the benefitof early pay-in of funds on execution of the trade. Where no allocation is made, Early pay in of funds would be allocated against the clients in the descending order of their net buy value of outstanding positions. Cross MarginSalient features of the cross margining available are as under: 1.Cross margining benefit is available across Cash and Derivatives segment2.Cross margining benefit is available to all categories of market participants 3. For client/entities clearing through same clearing member in Cash and Derivatives segments, the clearing member is required to intimate client detailsthrough afile uploadthrough Collateral Interface for Members (CIM) to avail the benefit of Cross margining4.For client/entities clearing through different clearing member in Cash and Derivatives segments they are required to enter into necessary agreementsfor availing cross margining benefit. 5. For the client/entities who wish to avail cross margining benefit in respect of positions in Index Futures and Constituent Stock Futures only, the entitysclearing member in the Derivatives segment has to provide the details of the clients and not the copies of the agreements. The details to be provided bythe clearing members in this regard are stipulated in theFormat. 1. Positions eligible for cross-margin benefit 2. Entities/clients eligible for cross margining 3. Facility of maintaining two client accounts 4. Computation of cross margining benefit 5. Provisions in respect of default 6. Additional Reports for Cross Margin 1. Positions eligible for cross-margin benefit: Cross margining is available across Cash and F&O segment and to all categories of market participants. The positions of clients in both the Cash and F&Osegments to the extent they offset each other are being considered for the purpose of cross margining as per the following prioritya.Index futures and constituent stock futures in F&O segment b.Index futures and constituent stock positions in Cash segmentc.Stock futures in F&O segment and stock positions in Cash segmenti.In order to extend the cross margin benefit as per (a) and (b) above, the basket of constituent stock futures/ stock positions should be acomplete replica of the index futures. NSCCL specifies the number of units of the constituent stocks/ stock futures required in the basket to be considered as a complete replica of the index on the website of the exchange (www.nseindia.com/NSCCL/Notification) from time to time.ii.The number of units are changed only in case of change in share capital of the constituent stock due to corporate action or issue of additionalshare capital or change in the constituents of the index.iii.The positions in F&O segment for the stock futures and index futures should be in the same expiry month to be eligible for cross margining benefit. iv.The position in a security is considered only once for providing cross margining benefit. E.g.

Positions in Stock Futures of security A usedto set-off against index futures positions will not be considered again if there is an off-setting positions in the security A in Cash segment.v.Positions in option contracts are not considered for cross margining benefit. 2. Entities/clients eligible for cross margining The clearing member has to inform NSCCL the details of client to whom cross margining benefit is to be provided. The cross margining benefit is available onlyif clearing members provide the details of clients in such manner and within such time as specified by NSCCL from time to time. 1.Client/entity settling through same clearing member in both Cash and F&O segment i.The clearing member has to ensure that the code allotted (code used while executing client trade) to client/entity in both Cash and F&Osegment is same ii. The clearing member must inform the details of clients to whom cross margining benefit is to be provided through a file uploadfacilityprovided in Collateral Interface for Members (CIM). 2.Client/entity settling through different clearing member in Cash and F&O segment i.In case a client settles in the Cash segment through a trading member / custodian and clears and settles through a different clearing member in F&O segment, then they are required to enter into necessary agreements. ii. In case where the client/entity settles through Custodian in Cash segment, then the client/entity, custodian and the clearing member in F&Osegment are required to enter into a tri-partite agreement as per theformat iii. In case where the client/entity clears and settles through a member in Cash segment, and a different clearing member in F&O segment, thenthe member in Cash segment and the clearing member in F&O segment have to enter into an agreement as per theformat. Further, theclient/entity must enter into an agreement with the member as per the format. iv. The clearing member in the F&O segment must intimate to NSCCL the details of the client/entityin F&O segment along-with letter from trading member/custodian giving details of client/entity in Cash segment who wish to avail cross margining benefit. 3. Facility of maintaining two client accounts As specified by SEBI, a client may maintain two accounts with their respective members to avail cross margin benefit only. The two accounts namely arbitrageaccount and a non-arbitrage account may be used for converting partially replicated portfolio into a fully replicated portfolio by taking opposite positions in twoaccounts. However, for the purpose of compliance and reporting requirements, the positions across both accounts shall be taken together and client shall continueto have unique client code. 4. Computation of cross margining benefit i.The computation of cross margining benefit is done at client level on an online real time basis and provided to the trading member / clearing member /custodian, as the case may be, who, in turn, shall pass on the benefit to the respective client.ii.For institutional investors the positions in Cash segment are considered only after confirmation by the custodian on T+1 basis and on confirmation bythe clearing member in F&O segment.iii.The positions in the Cash and F&O segment are considered for cross margining only till time the margins are levied on such positions.iv.While reckoning the offsetting positions in the Cash segment, positions in respect of which margin benefit has been given on account of early pay-in of securities or funds are not considered.v.The positions which are eligible for offset, are subject to spread margins. The spread margins are 25% of the applicable upfront margins on theoffsetting positions or such other amount as specified by NSCCL from time to time. vi. The difference in the margins on the total portfolio and on the portfolio excluding off-setting positions considered for cross margining, less the spreadmargins is considered as cross margining benefit. Example 5. Provisions in respect of default In the event of default by a trading member / clearing member / custodian, as the case may be, whose clients have availed cross margining benefit, NSCCL may:i.Hold the positions in the cross

margin account till expiry in its own name.ii.Liquidate the positions / collateral in either segment and use the proceeds to meet the default obligation in the other segment.iii.In addition to the foregoing provisions, take such other risk containment measures or disciplinary action as it may deem fit and appropriate in thisregard. 6. Additional reports Additional reportsproviding details of cross margin benefit and off-setting positions at client level are provided to members as per the format specified

Settlement (2/4) Pay-in and Pay-out for 'A', 'B', 'T', 'C', " F " , " G " & 'Z' Group of Securities The trades done by the Members in all securities in CRS are now settled on BSE bypayment of monies and delivery of securities on T+2 basis. All deliveries of securitiesare required to be routed through the Clearing House. The Pay-in /Pay-out of funds based on the money statement and that of securitiesbased on Delivery Order/ Receive Order issued are settled on T+2 day Dematpay-in The Members can effect pay-in of dematsecurities to the Clearing House througheither of the Depositories i.e. the National Securities Depository Ltd. (NSDL) or CentralDepository Services (I) Ltd. (CDSL). In case a Member fails to deliver the securities, the value of shares delivered short isrecovered from him at the standard/closing rate of the scripson the trading day.

Settlement (3/4)

Auto delivery facility This auto delivery facility is available for CRS (Normal & Auction) and for trade-to-trade settlements. Members wishing to avail of this facility have to submit an authority letter to theClearing House. This auto delivery facility is currently available for Clearing Member (CM) Poolaccounts and Principal accounts maintained by the Members with the respectivedepositories. Securities Pay-out BSE has also provided a facility to the Members for transfer of pay-out securitiesdirectly to the clients' beneficiary owner accounts without routing the same throughtheir Pool/Principal accounts in NSDL/ CDSL. In case delivery of securities received from one depository is to be credited to anaccount in the other depository, the Clearing House does an inter-depository transferto give effect to such transfers. In case of physical securities, the Receiving Members are required to collect the samefrom the Clearing House on the pay-out day.

Settlement (4/4) Funds Payout The bank accounts of the Members having pay-out of funds are credited by theClearing House with the Clearing Banks on the pay-in day itself In case a Member fails to deliver the securities, the value of shares delivered short isrecovered from him at the standard/closing rate of the scripson the trading day.