The Settlement Process — funds, securities, auctions and corporate actions

Where this chapter sits

Chapter 6 carries 15% of the paper, matching Chapter 5. Together they are 30% — the single largest block in Securities Operations and Risk Management.

The division of labour between them: clearing determines obligations; settlement discharges them.

The exam: 120 minutes, 100 marks, 50% to pass, 25% negative marking. This chapter has more numbers than any other in the paper — 0.07% penal interest, 20% and 10% close-out margins, 2% dividend threshold, ₹1,000 crore demerger test, 30/90 day running accounts. Learn them exactly or leave the question.

The settlement cycle

In the Indian equities market currently, all cash market segment settlements are on T+1 day rolling basis. Trades taking place on Monday are settled on Tuesday, Tuesday's trades settled on Wednesday and so on.

A settlement cycle is the period within which the settlement is made. For arriving at the settlement day, all intervening holidays — bank holidays, Exchange/clearing corporation holidays, Saturdays and Sundays — are excluded.

SEBI has also introduced the beta version of the T+0 rolling settlement cycle on an optional basis in addition to the existing T+1 settlement cycle in Equity Cash Markets.

For derivatives: the daily and final settlement of derivative trades is done on a T+1 working day basis, except for final settlement of the currency derivatives segment, where final settlement takes place on a T+2 basis.

And the timing of derivatives funds movements: the funds pay-in and pay-out of daily mark to market settlement, final settlement of futures contracts which are cash settled, premium settlement and the final exercise settlements of options contracts which are cash settled are typically effected before start of market hours on the next day, i.e. around 8:30 a.m.

The T+1 activity schedule

Why securities pay-out moved to 3:30 pm: SEBI vide circular dated June 5, 2024 has mandated that the pay-out of securities be credited directly to the client account by the Clearing Corporations. As a consequence, the timing of the payout of securities shall be revised from 1:30 PM to 3:30 PM. Thus, as a result of Direct Payout, the securities shall be credited to the clients' demat account on the same settlement day instead of one working day from the receipt of pay-out from the Clearing Corporation.

The carve-out: the securities direct pay-out shall not be applicable to clients having arrangements with custodians registered with SEBI for clearing and settlement of trades.

Settlement across holidays

Where holidays compress two settlements together:

• The CCs shall clear and settle the trades on a sequential basis, i.e. the pay-in and the pay-out of the first settlement shall be completed before the commencement of the pay-in and pay-out of the subsequent settlement(s).
• The cash or securities pay-out from the first settlement shall be made available to the member for meeting his pay-in obligations for the subsequent settlement(s).
• In order to meet their pay-in obligations for the subsequent settlement, members may need to move securities from one depository to another. The depositories shall, therefore, facilitate the inter-depository transfers within one hour and before pay-in for the subsequent settlement begins.
• The CCs and depositories shall follow a strict time schedule to ensure that the settlements are completed on the same day.

Determining obligations

Clearing Corporation receives the details of trades and prices from the Exchange. Settlement obligations are computed using predefined methodology specified for the segment/product.

Netted obligation. All purchase and sell transactions will be netted to determine the obligations. A member will have the obligation to deliver a security in a settlement only if the sell quantity is more than buy quantity. Similarly, in case the buy quantity is more than sell quantity, the member will receive a pay-out of the security. Fund obligations will also be computed on a netted basis across all buy and sell transactions.

Trade to trade or Gross obligations. Transactions will not be netted. Member's security pay-in obligation will be equivalent to cumulative sell quantity and security pay-out will be equivalent to cumulative buy quantity. Funds pay-in will be equivalent to cumulative value of buy transactions and funds pay-out will be equivalent to cumulative sell value.

The closing price

Currently, the closing price of stocks in the equity cash segment is determined on the basis of the Volume Weighted Average Price (VWAP) of trades executed during the last thirty minutes of the Continuous Trading Session.

SEBI has provided guidelines for the "Introduction of Closing Auction Session (CAS) in the Equity Cash Segment". The CAS will be made applicable in a phased manner. Initially, the closing price of stocks in the cash segment on which derivative contracts are available shall be determined based on CAS.

CAS shall be implemented as a separate session of 20 minutes from 3:15 pm to 3:35 pm on all trading days:

Why the closing price matters — seven uses:

• Basis for the post close session.
• Basis for the next day's base price.
• Basis for the next day's morning block deal window.
• Basis for the computation of end of day index value.
• Basis for the settlement of derivatives contracts.
• Basis for the computation of Mark to Market margin.
• Basis for the computation of NAV for Mutual Funds.

Settlement of funds

Every clearing member shall maintain and operate a separate and distinct primary clearing account with one of the designated clearing banks, and a separate and distinct primary clearing account for each segment.

Clearing members having funds obligation to pay should have clear balance of requisite funds in the clearing accounts on or before the stipulated funds pay-in day and the stipulated time. The clearing banks shall debit/credit the clearing accounts of clearing members as per instructions received from the Clearing Corporation.

And the one-way rule: clearing members can deposit funds into these accounts in any form and can withdraw funds from these accounts only in self-name.

Mode of payment

Brokers should not accept cash from the client whether against obligations or as margin for purchase of securities, and/or give cash against sale of securities to the clients.

All payments shall be received/made by the brokers from/to the clients strictly by account payee crossed cheques/demand drafts or by way of direct credit into the bank account through NEFT, or any other mode allowed by RBI.

The brokers shall accept cheques drawn only by the clients and also issue cheques in favour of the clients only.

Audit trail is required in both directions. Members shall maintain an audit trail of the funds received through electronic fund transfers to ensure that the funds are received from their clients only. While receiving funds from the clients through pre-funded instruments, such as Pay Order, Demand Draft, Banker's cheque etc., members should maintain an audit trail of the funds so received, to ensure that the funds are received only from the client bank account.

The three account names

SEBI mandated designated client bank accounts, and has since split them by direction:

And SEBI has decided to put in place a structured Unified Payment Interface (UPI) address mechanism for SEBI-registered investor-facing intermediaries to collect funds from their investors, to further enhance accessibility and safety in the securities market.

Running account settlement

Unless otherwise specifically agreed to by a client, the settlement of funds shall be done within 24 hours / 1 working day of the pay-out.

A client may specifically authorize the stock broker to maintain a running account (only for funds) — and note that settlement of running account for securities has been discontinued, so these rules apply to funds only.

The conditions:

• The authorization shall be dated and revocable.
• The authorization shall be signed by the client only and not by any Authorized Person on his behalf or any holder of the Power of Attorney.
• The authorization shall contain a clause that the client may revoke the authorization at any time.
• Settlement shall be done after considering the End of the day (EOD) obligation of funds as on the date of settlement across all the Exchanges, at least once within a gap of 30 / 90 days between two settlements as per the preference of the client.
• Settlement shall be at the choice of the clients on a Quarterly or monthly basis, on the dates stipulated by the Exchanges. Settlement of running account shall be settled on the first Friday and/or Saturday of every month/quarter.
• Stock exchanges shall jointly issue the annual calendar for the settlement of running account at the beginning of the financial year.
• While settling the account, the broker shall send to the client a "statement of accounts" containing an extract from the client ledger for funds and an extract from the register of securities displaying all receipts/deliveries of funds/securities.
• The required bank details for initiating electronic fund transfers shall be obtained from new clients and updated for existing clients. Only in cases where electronic payment instructions have failed or have been rejected by the bank may the stock broker issue a physical payment instrument.
• For clients having outstanding obligations on the settlement date, the stock broker may retain the requisite funds towards such obligations.
• The client shall bring any dispute arising from the statement of running account to the notice of the broker within 30 working days from the date of statement.
• There is no inter-client adjustment for the purpose of settlement of running account.
• Once the TM settles the running account of funds of a client, an intimation shall be sent to the client by SMS on the mobile number and also by email.

Transfer timelines: the stock broker shall transfer the funds/securities lying in the credit of the client within one working day of the request if the same are lying with him, and within three working days from the request if the same are lying with the Clearing Member/Clearing Corporation.

The dormant credit balance rule: for clients having credit balance, who have not done any transaction in the 30 calendar days since the last transaction and any amount of such client's funds is lying with the member for more than such 30 calendar days, the entire credit balance of the client shall be returned to the client by the TM on the upcoming settlement dates of the monthly running account settlement cycle, irrespective of the settlement cycle preferred by the client. However, if the client trades after 30 calendar days and before those settlement dates, the settlement shall continue as per the client's quarterly/monthly preference.

Three cases where periodic settlement may not be necessary:

• For clients availing margin trading facility, to the extent of funds/securities relating to MTF used by the client.
• For funds received from the clients towards collaterals/margin in the form of bank guarantee or fixed deposit receipts.
• In case of institutional clients settling trades through custodians.

And the anti-mixing safeguard: to safeguard against any possibility of misuse of one client's funds to settle another client's running account, it is stipulated that any funds received from clients shall remain in the upstreaming account. TM shall ensure that funds received from clients whose running account has been settled remain in the "Up Streaming Client Nodal Bank Account" and no such funds shall be used for settlement of running account of other clients.

On authorized persons: the Authorized Person is not permitted to accept client's funds and securities. The TM should keep a proper check. Proprietary trading by the Authorized Person should be permitted only on his own funds and securities and not using any of the client's funds.

Funds shortages

Members failing to fulfil their funds obligations (including STT/Stamp duty obligation and Capital Cushion requirement) by the scheduled date and time to the Clearing Corporation shall render themselves liable for withdrawal of trading facility or such other actions including disciplinary actions.

In case of pay-in shortfall, the trading facility of the trading member shall be withdrawn, and the securities pay-out would be withheld if:

• The shortfall is in excess of the amount specified by SEBI or the Clearing Corporation from time to time.
• There are recurring fund shortages by the member within a certain period and for a certain amount, as specified.

The Exchange/Clearing Corporation may levy a penal interest of not less than 0.07 percent per day on the pay-in shortage of the member.

The funds defaulting member will be allowed such time as may be permitted by the relevant authority, depending upon the facts of the case, to bring in the amount in default. If the funds are not brought in at any time, the Clearing Corporation, at its discretion, will proceed to close out securities in the normal/auction market.

Settlement of securities

Giving/taking delivery of securities in "demat mode" should be directly to/from the "beneficiary accounts" of the clients, except delivery to a recognized entity under an approved scheme.

On a sale: immediately on receipt of intimation of execution of trade from the broker, the seller client should issue a delivery instruction slip to the DP with whom the client maintains his demat account. Securities are transferred to the broker's clearing pool account. Alternatively the client may use a DDPI, under which clients explicitly agree to authorize the stock broker / stock broker and depository participant to access their BO account for the limited purpose of transferring securities from their individual demat account to the broker's pool account for the purpose of meeting their pay-in obligation.

On a purchase: a purchaser of securities can give a one-time standing instruction to his DP for receiving securities in his account. This standing instruction can be given at the time of opening of account or later. Alternatively, the client may choose to issue a separate receipt instruction to his DP every time.

Depository clearing system

In the Cash segment the securities pay-in takes place on T+0 and/or T+1 day based on the settlement cycle.

Members shall maintain settlement accounts at both depositories, viz. NSDL and CDSL, and provide specific pay-in instructions to depositories for effecting pay-in. The maintenance of active pool accounts in both depositories is mandatory even if they have opted for the facility of receiving their pay-out in their preferred depository. Trading members who are clearing their trades with other clearing members shall be required to maintain Trading member pool accounts with both the depositories.

Two identifiers matter:

The settlement number is a unique identifier that tags a specific transaction or a batch of transactions belonging to a particular settlement cycle. It links a trade to a specific settlement date, ensuring that all obligations are met on the correct day, and is used by brokers, clearing corporations, and depositories to reconcile their records.

The settlement type / market type refers to the specific segment or category under which a trade is executed (e.g. normal, auction, limited physical market). The market type dictates whether trades are settled in dematerialized or physical form, whether it is gross settlement or trade for trade settlement.

The six permitted demat account categories

Stock brokers are required to maintain demat accounts only under the following 6 categories specified by SEBI:

Physical settlement of F&O securities: obligations in the physical settlement of the F&O segment for a particular expiry shall be netted with obligations in the Capital Market segment of the corresponding trade date. The obligation shall be netted where the clearing member–trading member–client (UCC Code) is common across the Capital Market and F&O segments for the same security. The net sell or buy obligations shall be settled in the Capital Market segment in the settlement/market type and settlement number of the Capital Market segment only.

Auction of securities

Members failing to fulfil their securities deliverable obligations to the Clearing Corporation shall be subjected to a penalty. Further, the valuation amount of the shortage will be considered as a funds shortage where shortage confirmation is not received from the clearing bank.

When there are shortages in delivery by a seller broker, the CC will conduct the buy-in auction. The clearing corporation conducts a buy-in auction through the Exchange system to buy shares from the open market for delivering to the buyer broker. Auctions are conducted on settlement day.

Securities shortages occur generally when a short seller fails to square up the position, or a seller fails to deliver shares on time, or a seller delivers bad/wrong shares. Once shortages are identified, the members are debited by an amount equivalent to the securities not delivered and valued at a valuation price. This is known as valuation debit.

In short: an auction is a mechanism utilized by the clearing corporation to fulfil its obligation towards the buying trading members.

How the auction runs

An auction tender notice is issued by Exchanges/CCs to the trading members informing them about (a) the names of the scrips which are short or have not been delivered, (b) the quantity slated for auction, and (c) the date and time of the auction session.

The auction for the undelivered quantities is conducted on settlement day after completion of payout, between 2:00 p.m. and 2:45 p.m. (in the case of BSE) and 2:30 pm onwards (in the case of NSE), for all scrips under compulsory rolling settlements other than scrips which are directly closed out (e.g. trade for trade securities) and securities under corporate action.

Two limits: in no case would the auction be held more than once unless the same is approved by a special resolution of the governing board of the CC, and in no case shall the auction be held beyond a period of one week from the pay-in day of the settlement in which the concerned contract was entered into.

The auction settlement: members participating in the auction session will receive the obligation for securities pay-in on the same day, if their offers are accepted. The members are required to deliver the shares to the clearing corporation on or before the auction pay-in day, i.e. Auction + 1 day. The auction funds paying members are required to have clear balance of funds in their clearing account towards the obligation within the time specified on settlement day. Pay-out of auction shares and funds is also done on the Auction + 1 day.

Self auction — internal shortages

In some cases a selling client has failed to deliver the shares sold in a settlement to a member. However, this may not result in failure of the Member to deliver the shares to the Clearing House, as there was a purchase transaction by his other buying client in the same security and the same was netted off for the purpose of settlement.

In such a case, the Member would require shares so that he can deliver the same to his buying client. These shortages are called internal shortages.

The mechanism: members have been given an option by the clearing corporation to submit the details of such internal shortages on pay-in day for conducting self-auction. These shortages are clubbed with the normal shortages in a settlement and the auction is conducted by the clearing corporation for the combined shortages.

With direct pay-out now in force, SEBI has advised TM/CM to handle shortages arising due to inter se netting of positions between clients through the process of auction as specified by CCs, and advised TM/CM in such cases not to levy any charges on the client over and above the charges levied by the CCs.

Two important limits: CCs may charge fees for facilitating such internal auction, and crucially CC may not provide any settlement guarantee for auction of internal shortages. Where the clearing corporation is not able to obtain securities, the member shall close out such shortages as per guidelines provided by Clearing Corporations.

Close-out pricing — the four cases

Close out happens when an auction cannot deliver. If on the auction day there are no sellers for a particular short delivery, the Clearing Corporation will then carry out a process called "Close out".

And for T+0: auction shall not be conducted in case of securities shortage for optional T+0 settlement. Security shortages shall be directly closed out at 10% above the highest price of the day across all exchanges for the T+0 market.

On corporate actions generally: in case a company announces any corporate action, short deliveries of the shares traded on cum basis shall be directly closed out. The Clearing Corporation shall announce an ex-date and all cum-transactions shall go for auction if the auction pay-out happens on or before the Record date / Book closure minus 1 business day.

Where trades are directly closed out without any auction: securities under trade for trade category, securities under corporate action, trades done on block deal window.

Where the money goes: the proceeds from Auction or Close-out should be used to settle the claim of the aggrieved party. Any amount remaining thereof should be credited to the Core Settlement Guarantee Fund ("Core SGF") instead of crediting it to the defaulting party's account.

Settlement of equity derivatives

Since October 2019, all positions in futures and options on individual securities that remain open on the expiry date of the contract are required to be settled by physical delivery. Index futures and options continue to be settled in cash.

Futures

Futures contracts have two types of settlements: (A) the mark-to-market settlement, which happens on a continuous basis at the end of each day, and (B) the final settlement, which happens on the last trading day.

Mark-to-market settlement. MTM is a process by which margins are adjusted based on daily price changes in the markets for underlying assets. The clearing member who suffers a loss is required to pay the MTM loss amount, which is passed on to the clearing member who has made an MTM profit. Clearing members are responsible for collecting and settling the daily MTM profits/losses incurred by the TMs and their clients clearing and settling through them.

After completing the day's settlement process, all the open positions are reset to the daily settlement price. These positions become the open positions for the next day. The daily MTM of all futures contracts are cash-settled.

The workbook's worked example, on an index futures contract where 1 contract = 200 lots:

Notice the mechanics: each day's "buy price" is the previous day's settlement price, because all the open positions are reset to the daily settlement price.

Final settlement. On the expiration day, after the close of trading hours, the clearing corporation marks all positions of a clearing member to the final settlement price.

For cash-settled futures: all positions (brought forward, created during the day, or closed out during the day) at the close of trading hours on the last trading day are marked to market at the final settlement price and settled. Members having a funds pay-in obligation must have a clear balance of funds by the declared pay-in time on the settlement day.

For physically settled futures: all open futures positions after the close of trading on the expiry day will be considered for physical settlement. The final exercise settlement is implemented on the T+1 date, where T is the expiry date. Settlement obligations shall be computed at the futures' final settlement price of the respective contract, and the difference between the previous day's settlement price/trade price and the final settlement price on the expiry date shall be cash settled along with the daily MTM on a T+1 basis.

Options

Options contracts have two types of settlements: daily premium settlement and final settlement.

Daily premium settlement. The buyer of an option pays the premium, while the seller receives the same. The amount payable and receivable as premium are netted to compute the net premium payable or receivable amount for each client for each option contract.

Final exercise settlement. All the in-the-money (ITM) stock options contracts are automatically exercised on the expiry day. ITM contracts are those that have some intrinsic value on the expiry day.

For cash settled index options: index options in India are European-style options, meaning that they can be exercised only on the expiry day. All long positions in ITM options are automatically assigned randomly to short positions in option contracts with the same series. The final settlement price is the closing price of the underlying on the expiry day, and:

Call options = Closing price of the security on the day of exercise − Strike price

Put options = Strike price − Closing price of the security on the day of exercise

For physically settled stock options:

• In the case of ITM call options, exercise of a long call results into a buy (security receivable) position and assignment of a short call results into a sell (security deliverable) position.
• In the case of ITM put options, exercise of a long put results into a sell (security deliverable) position and assignment of a short put results into a buy (security receivable) position.

The settlement obligation for options contracts is computed at respective strike prices of the option contracts.

Settlement prices

Daily settlement price: the closing price of the contract (specific Exchange or across Exchanges). In case of illiquid contracts a theoretical price is computed based on SEBI guidelines.

Final settlement prices:

Funds settlement in derivatives: the funds obligation of daily MTM settlement, final settlement of cash-settled futures, premium settlement and the final exercise settlements of cash-settled options are generated on a net basis at clearing member level. Funds pay-in is effected before the start of market hours on the next day.

Securities settlement in derivatives: the final deliverable/receivable positions at a clearing member shall be arrived at after netting the obligations of all clients/constituents/trading members clearing through the respective clearing member.

Corporate action adjustments

Record date and ex-date

Companies announce benefits or changes for their shareholders as of a given date in the form of corporate actions, such as rights shares, bonus shares, stock splits, dividends. Investors are considered eligible shareholders in the records of the company if they hold the shares on the given date, which is also known as the record date.

A stock is said to trade with the benefits of the corporate action or cum-benefit up to 1 trading day before the record date, after which it trades without the benefit or ex-benefit. The date a stock starts trading ex-benefit is known as the ex-date.

In the equity segment, Exchanges adjust the base price of the stock from the date the stock starts trading without benefit.

The workbook's illustration:

And the T+1 consequence, which is exactly the point: an Investor who bought securities on May 27, 2025 will receive securities in their demat account on May 28, 2025 before EOD. Such investors will be eligible for bonus shares. An investor who bought securities on May 28, 2025 will receive the securities on May 29, 2025 before EOD and hence not be eligible.

Which actions are adjusted

Stock benefits:

• Bonus.
• Rights.
• Merger/De-merger.
• Amalgamation.
• Splits.
• Consolidations.
• Hive-off.
• Warrants.
• Secured Premium Notes (SPNs), among others.

Cash benefit: cash dividend.

The governing principle: the basis for any adjustment for corporate actions in the equity F&O segment shall be such that the value of the position of the market participants, on the cum and ex-dates, shall continue to remain the same as far as possible. This will facilitate retaining the relative status of positions viz. in-the-money, at-the-money and out-of-money, and will also address issues related to exercise and assignments.

When: any adjustment for corporate actions would be carried out on the last day on which a security is traded on a cum basis in the underlying equities market, after the close of trading hours.

What may change:

• (a) Strike Price.
• (b) Position.
• (c) Market Lot/Multiplier.

In a lot of cases, adjustments may result in the change in date of expiry of the contract as well — the contract will be force closed before the expiry date and the adjusted contracts will trade instead. The adjustments would be carried out on all open positions.

The formulas

Bonus, Stock Splits and Consolidations:

• New strike price = old strike price ÷ adjustment factor.
• New market lot/multiplier = old market lot × adjustment factor.
• New position = old position × adjustment factor.

Rights — note that everything runs the other way:

• New strike price = old strike price × adjustment factor.
• New market lot/multiplier = old market lot ÷ adjustment factor.
• New position = old position ÷ adjustment factor.

Computing the rights adjustment factor:

• Rights Entitlement = A.
• Number of Existing shares = B.
• Total Entitlement = A+B.
• Underlying close price on the last cum date = P.
• Issue price of the rights = S.

Benefit per Right Entitlement = (P − S) × A

Benefit per share, E = (P − S) × A / (A + B)

Adjustment Factor = (P − E) / P

Dividend if any, declared by the company along with rights, shall be adjusted as per the prevailing dividend adjustment policy in the Equity F&O Segment.

Fractions. The above methodology may result in fractions due to the corporate action, e.g. a bonus ratio of 3:7. With a view to minimizing fraction settlements:

1. Compute value of the position before adjustment.
2. Compute value of the position taking into account the exact adjustment factor.
3. Carry out rounding off for the Strike Price to the nearest tick size and Market Lot to the nearest integer.
4. Compute value of the position based on the revised strike price and market lot.

The difference between 1 and 4, if any, is decided in the manner laid down by the relevant authority by adjusting Strike Price or Market lot, so that no forced closure of open position is mandated.

Dividends

For the purpose of adjustments in equity F&O, dividends which are below 2 percent of the market value of the underlying stock would be deemed to be ordinary dividends, and no adjustment in Equity F&O would be made for ordinary dividends.

For extra-ordinary dividends — at and above 2 percent of the market value of the underlying security — or all cases of dividends where the listed entity has sought exemption from the timeline prescribed under the LODR Regulations, 2015, there would be adjustment in Equity F&O.

Which market price is used to test the 2 percent:

• The closing price of the scrip on the day previous to the date on which the announcement of the dividend is made by the Company after the meeting of the Board of Directors.
• However, in cases where the announcement of dividend is made after the close of market hours, the same day's closing price would be taken.
• Further, if the shareholders of the company in the AGM change the rate of dividend declared by the Board of Directors, then the test would be based on the rate of dividend communicated to the Exchange after AGM and the closing price of the scrip on the day previous to the date of the AGM.

The adjustment itself: in case of declaration of "extra-ordinary" dividend by any company, the total dividend amount (special and/or ordinary) would be reduced from all the strike prices of the option contracts on that stock. The revised strike prices would be applicable from the ex-dividend date specified by the Exchange. All open positions shall be carried forward at the daily settlement price less dividend amount for the respective futures contract.

Mergers and demergers

On the announcement of the record date for the merger, the exact date of expiration (last cum-date) would be informed to members.

After the announcement of the Record Date, no fresh contracts on futures and options in equity derivatives would be introduced on the underlying that will cease to exist subsequent to the merger/demerger.

Un-expired contracts outstanding as on the last cum-date would be compulsorily settled at the settlement price. The settlement price shall be the closing price of the underlying on the last cum-date.

Demerger — the four eligibility conditions for re-introducing derivative contracts from the first day of listing of the post-restructured company:

• (a) The futures and options contracts on the stock of the original (pre-restructure) company were traded on any Exchange prior to its restructuring.
• (b) The pre-restructured company had a market capitalization of at least ₹1,000 crores prior to its restructuring.
• (c) The post-restructured company would be treated like a new stock and, in the opinion of the Exchange, is likely to be at least one-third the size of the pre-restructuring company in terms of revenues, or assets, or (where appropriate) analyst valuations.
• (d) In the opinion of the Exchange, the scheme of restructuring does not suggest that the post-restructured company would have any characteristic (for example extremely low free float) that would render the company ineligible for derivatives trading.

If satisfied: (a) all existing contracts of the security shall be expired on the last cum date; (b) the Exchange shall introduce near month, middle month and far month derivative contracts on the stock of the restructured company from the ex-date of the demerger.

Other corporate actions: the relevant authority may, on a case by case basis, carry out adjustments for other corporate actions in conformity with the above guidelines, including compulsory closing out, where it deems necessary.