Net Settlement of Cash segment and Futures & Options (F&O) segment upon expiry of stock derivatives

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..... d Futures Options (F O) segment upon expiry of stock derivatives SEBI, vide circular no. SEBI/HO/MRD/DP/CIR/P/2018/67 dated April 11, 2018 , has interalia mandated physical settlement of stock derivatives, upon expiry of such derivatives, in a phased manner. Further, it mentioned that the risk management framework, settlement mechanism and other procedures of the cash segment shall be appli .....

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..... ) shall be available to investors whose trading member (TM) clears trades in F O segment and cash segment through the same clearing member (CM) i.e. benefit of netting shall be available to investors who trade and clear through the same TM-CM combination in Cash and F O segment. However, investors whose TM clears trades through different CM / Clearing Corporation (CC) will not be able to avail the .....

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..... very backed transactions only. 3.5. Under the Net Settlement mechanism, netting of delivery obligations shall be only for the purpose of settlement. Therefore, Securities Transaction Tax (STT) and Stamp Duty shall continue to be computed, levied and reported on a segment wise level. 3.6. CCs shall continue to settle obligations on net basis at CM level. Further, CCs shall continue to maintai .....

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..... s of implementation of the provisions of this circular. 6. This circular is being issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 , read with Section 10 of the Securities Contracts (Regulation) Act, 1956 to protect the interests of investors in securities and to promote the development of, and to regulate the securiti .....

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..... t. 3. The investor will deliver the stock in F O settlement. 4. The investor will receive Rs. 110. Further, under the existing mechanism, margin would be applicable on delivery obligations in cash segment and F O segment separately. Under the Net Settlement mechanism, there would be no need for the investor to arrange for funds of Rs. 101, i.e., the investor would have a net pay-out of .....

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