ICCL - SLB Process Flow
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Process Flow
First Leg

First Leg- T Day

First Leg- T+1 Day

  • In case the borrower fails to honor his securities pay-in obligation, ICCL shall conduct a buy-in auction to arrange for lender's shares
  • In case the lender fails to honor his settlement obligation, the transactions shall be closed-out at higher of the following rates
    • 25% of closing price of the security (as per closing price in the Equity Cash Segment of BSE) on T+1 day
    • Highest rate of the security from the trading day to T+1 day minus T+1 day closing price of the security
  • Financial close-out shall only be conducted as a last resort

Return Leg

Return Leg

  • Lender pays 25% of lending price (Price of the Stock * Quantity) as margin on T day which is released after pay-in on T + 1 day
  • Borrower pays twice the lending fees as margin on T day, which is released on T + 1 day after Pay-in. However, he is required to pay the lending price + VaR + ELM + M2M from the BOD of T + 1 day till the expiry of the contract
  • In the event of fund shortages by the borrower, the SLB transactions shall be cancelled as may be decided by ICCL and accordingly, the securities shall be returned to the lenders along with lending fees
  • In the event, lender fails to deliver securities in the settlement the transactions shall be closed-out

Early Recall /Early Return Leg

Early Recall: T Day

Early Return : T+1 Day

  • A lender enters into an early recall trade if he requires the shares before the expiry of the contract
  • Borrower may accept the early recall trade however the borrower needs to complete early pay-in of securities before accepting the early recall trade of the lender
  • Borrower can also initiate an early return trade. However, the early-pay-in of securities is compulsory

SLB Roll Over

SLB Roll Over

  • The lender/borrower may extend the period of an existing contract through the roll over mechanism
  • An existing contract can be rolled over for a maximum of further two months
  • There will be no settlement of securities. However, there may be funds settlement for lending fees from the borrower to the lender for the extended period
  • New obligations will be generated for the lender/borrower with the new contract expiry date
  • The settlement will take place at the end of the contract period as per the return leg cycle