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WHAT IS PAY – IN AND PAY – OUT?

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Pay – in day is the day when the sold securities are delivered to the stock exchange by the seller and funds for securities purchased are made available to the stock exchange by the buyers. 

Pay – out day is the day when the purchased securities are delivered to the buyer and the funds for the securities sold are given to the seller. At present, the pay – in and pay – out happens on the 2nd working day after the trade is executed on the exchange, which is settlement cycle i. e. T + 2 rolling settlement. 

FUNDS PAY – IN: Once the reconciliation of securities is completed by the Clearing House, the bank accounts of member – brokers maintained with the ten clearing banks are directly debited through computerized posting for their funds settlement obligations. 

Once the pay – in of securities and funds is complete, the Clearing House arranges for the pay – out of securities and funds. 

In case of those members, whose funds pay – in obligations are returned by their clearing banks on account of insufficient funds in their bank accounts at the time of pay – in, their BOLT TWSs are now immediately de – activated during the trading hours itself, on receipt of such intimation from the clearing banks as against the earlier practice of de – activating their BOLT TWSs at the end of trading on that day. BOLT (BSE online terminal) TWSs of such members remain de – activated till the pay – in obligations are cleared by them. 

SECURITIES PAY – OUT: In case of demat securities, the same are credited by the Clearing House in the Pool/Principal Accounts of the member – brokers. The Exchange has also provided a facility to the member – broker for transfer of pay – out securities directly to the client‟s beneficiary owner accounts without routing the same through their Pool/Principal accounts in NSDL/CDSL.

For this, the concerned member – brokers are required to give a client wise break up file which is uploaded by the member – brokers from their offices to the Clearing House. Based on the break up given by the member brokers, the Clearing House instructs depositories, viz., CDSL & NSDL to credit the securities to the Beneficiary Owners (BO) Accounts of the clients. 

In case delivery of securities received from one depository is to be credited to an account in the other depository, the Clearing House does an inter depository transfer to give effect to such transfers. 

In case of physical securities, the Receiving Members are required to collect the same from the Clearing House on the pay – out day. This process of passing on delivery of securities purchased by the member – brokers to them by the Clearing House is called pay – out of securities.

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