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INSTRUCTIONS PROCESSING

INTER-CONNECTED STOCK

EXCHANGE OF INDIA LTD.


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INDEX:-

INSTRUCTIONS DETAILS.

INSTRUCTIONS ENTRY AND VERIFICATIONS.

PROCESSING TO BE COMPLETED.

DEADLINES.

INTERACTIVE SESSION


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ACCOUNT TRANSFERS:-

The electronic transfer of shares from one account to another are

referred to as Account Transfers. Such transfers can be effected

between various clients within the same Depository or between

various depositories.

The transfer of shares could be from one Beneficiary account to

another, from Pool account to a Beneficiary account, from Pool

Account to Clearing Corporation, Inter settlement

instruction, Inter Depository instruction etc.


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The following flow chart gives a diagrammatic

representation of Settlement of Trades.

CLIENT A BROKER A

CLEARINGCORPORATIO

STOCK

EXCHANGE

BROKER B CLIENT B


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Every selling client has an obligation to delivery shares to the broker

who in turn has an obligation to deliver the shares to the

Exchange/Clearing Corporation. The Exchange/ Clearing Corporationthen delivers the shares to the buying broker. Hence the main role

of the DP is to effect the transfer of shares in the accounts of the

various intermediaries.

The Delivery Instructions given by Clients can be broadly

categorised into:-

(i) Market Trades.

(ii) Off-Market Trades.


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Market Trades:

The transfer of securities from the Beneficiary Account to a

Clearing Member Pool Account is a Market Trade.

The following are the details to be filled up by the client for

execution of Market Trade.

1. CM BP ID: Clearing Member - Business Partner ID is allotted

by CDSL to the broker. A broker can open only one CM account

with a DP. He cannot open multiple CM accounts. The CM BP ID

is a unique identification given to the DP across the Depository.

A CM has different CM BP IDs for different exchanges.


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3. Market Type: There are different market types under which trading

is done in exchanges. The most common market type is "NORMAL or

ROLLING" market type.Under this market type the settlement is usually

for a period of 2 working days. That is T + 2 days.

The other common market type are TRADE FOR TRADE, AUCTIONNORMAL, AUCTION ROLLING

Branch has to exercise utmost cautious while executing the delivery

instructions under correct market type or else any mismatch will lead

to AUCTION of shares and in turn loss to the client and bank.


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4. Execution Date: In the depository environment, there is a provision

for future dated execution dates. Execution date is the date on which

the client's account is actually debited and the shares transferred tothe counter party. The client can give an instruction on 07/XX/XXXX

and mention the execution date as 10/XX/XXXX. The account of the

customer will be actually debited on 10/XX/XXXX in this case.

The execution date should not be later than the Pay-In date for that

particular settlement.


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Off-Market Trades:

The transfer of shares from one Beneficiary Account to another

constitutes an Off-Market Trade. The transfers are effected betweentwo accounts of clients without the involvement of the broker.

The following are the details to be filled in by clients for execution

of Off-Market Trades.

1. DP ID: In case of Off-Market trades, the shares are transferred from

one beneficiary account to another, within the same DP or Inter DP.

The customer needs to mention the DP ID of the counter-party to

whose account the shares are to be transferred.


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2. Client ID: The client needs to furnish the client ID of the

counter-party to whom the shares have to be transferred. The

combination ofDP ID and Client ID is of utmost importance as anymistake may transfer to a completely different account since the

Client Ids are unique within a DP but not across all DPs.

3. Execution Date: The Client needs to mention the date on which

he wishes to transfer the shares to the counter-party.


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PAY-IN OF SECURITIES:

(a) The BRANCH shall ensure that the instruction form is complete

and the signature of the Clearing Member is valid.

(b) The Clearing Member may give Delivery-Out instructions to its

DP to move securities from its Pool account to its Delivery account

(c) The Clearing Member may give a Delivery-Out instruction to the

DP to move securities from its Pool account to its Delivery account

on irreversible basis. Such instructions once effected shall not be

modified or cancelled by the Clearing Member.


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(e) The BRANCH shall execute the Delivery-Out instruction to move

securities from the Pool account of the Clearing Member to the

Delivery Account of the Clearing Member

(h) The instructions to move securities from the Clients account to

the Pool account of the Clearing Member and the delivery-outinstructions to move securities from the Pool account of the Clearing

Member to the Delivery account of the Clearing Member shall have

effect only before the CDSL Deadline for the relevant settlement.


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PAY-OUT OF SECURITIES:

(a) The Clearing Member may give instructions to its DP to debit itsPool account and credit the Clients accounts.

(b) The BRANCH shall ensure that the instruction form is complete

and the signature of the Clearing Member is valid.

(c) The BRANCH shall execute the instructions of the Clearing

Member to debit its Pool account and credit the Clients accounts under

OFF - MARKET MODE.


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INTER-SETTLEMENT INSTRUCTIONS:

(a) The Clearing Member may for the purpose of moving securities

within its Pool Account submit an inter-settlement Instruction Form to

the Participant.

(b) The BRANCH shall ensure that the instruction form is completeand the signature of the Clearing Member is valid.

(c) The BRANCH shall execute the instructions of the Clearing

Member to move securities within its Pool account.


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INTER DEPOSITORY TRANSFER OF SECURITIES:

(a) Instruction in respect of inter-depository transfers shall be executed

by the BRANCH on receipt of a duly filled in inter-depository transferinstruction forms from Clients and Clearing Members for delivery

and receipt of securities.

(b) The BRANCH should check for the completeness of the forms andvalidity of the signature of the Client and Clearing Member before

the instructions are executed.


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PLEDGE AND HYPOTHECATION :

The investor may mark a pledge on his securities .For this purpose

, the bank granting loans should be a DP or client of a DP. It is a

must for the pledgee and pledgor to have an account in the

depository to create a pledge. However, the pledgor and the

pledgee may maintain accounts with two different DPs. In case of

pledge the ownership in securities does not transfer, the pledgorcontinues to remain the beneficiary holder of the pledged securities

and will receive benefits of a corporate action, if any.

Process flow with regard to Pledge.

The investor initiates a pledge instruction through his DP

The pledgee confirms the instruction through his DP.


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The pledge quantity is blocked in the investors account till the

pledge is closed.

Pledge account closes when the pledgee issues instructions tounblock the pledge quantity in the investors account or confirm the

pledge closure instructions initiated by pledgor

A pledge is / can be invoked at the option of the pledgee when thepledgor fails to meet his obligation. The pledgee may issue instructions

to his DP to dispose off the securities by debit of the investors account

with his DP. The securities that were pledged and were in lock-in

status, cannot be invoked before the lock-in release date.


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Rematerialisation.

In the Indian depository system, the customer has the option of

reconverting his holdings from the electronic form to physical form.This process of conversion of the electronic holdings into physical form

is known as Rematerialisation. The investor has the option of

rematerialisation of his shares in jumbo lots, which would enable him

to reduce the amount of physical paper with him. When the shares arerematerialised and new share certificates are issued to the investor, the

new certificates would contain the new folio and distinctive numbers.

At the time of Rematerialisation of securities the securities shall be

issued to the persons as per the pattern of holdings in the account of

the Depository Participant from which such securities are rematerialised.


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CLIENT DP

RTA CDSL

RRF forms

Electronic communication

Electronic communication

RRF forms sentPhysical

certifiate sent


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Precautions to be taken while processing DIS :

1) Settlement Calendar - It should be taken as PAY-IN Date wise in theMorning and Evening for the same date and next date.

2) Ensure DIS of same day Pay- in to be executed strictly before

9:45 a.m.

3) Ensure DIS of same day Auction Pay - in to be executed strictly

before 11:00 a.m.

4) Ensure DIS of same day irreversible delivery out to be executed

strictly before 02:00 p.m.


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Contd

5) Ensure DIS of same day Interdepository instructions to be verified


6) Ensure DIS of same day Account Transfer instructions to be verified


7) After verification of all the instructions ensure to take PENDING

REPORT and DOUBLE VERIFICATION REPORT from Main menu

of BIRDS.

8) Ensure to check the Waste verification report and physical slips mustbe equal to the DIs process as on date on daily basis. The process

should be maintained to tally the slips recd as on date.

Documents

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