After the lacklustre beginning that led to the withdrawal within a day, the exchanges and depositories are expected to take a second shot at direct payout of securities early next week after some tweaking in the system, said sources.
“The issues should be resolved in a few days. With slight system adjustments and fine-tuning of processes at the depositories’ end… direct payout should run smoothly from next week,” a source said.
Direct payment, which started on Monday, saw about half of the securities being returned by the depositories to clearing houses due to overwhelming volumes and issues with efficiency in handling legal provisions, forcing brokers to credit their clients’ accounts.
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On a typical T+1 settlement day, investors would see shares credited by around 2 p.m, but Monday’s attempt saw clearing houses crediting securities to either clients or brokers till Tuesday midnight.
The implementation of the direct payout of securities was already deferred once before. SEBI had set the effective date on October 14, which was postponed to November 11 following representations from MIIs, including depositories and clearing corporations.
“The volume was humongous, going from crediting securities to 500-1,000 brokers to directly into individual clients took longer than expected,” said another source. “It is not a simple credit transaction to the client’s account. There are multiple transactions and legal provisions that need to be taken care of, which took a bit longer.”
In the case of many small brokers, 100% of their clients’ securities were sent to the brokers’ pool to be distributed among clients. For larger brokerage houses, some securities were directly credited to clients’ demat accounts, but a high volume of bundled-up securities was sent to brokers.
“We are still in the process of segregating securities received from clearing houses. Expect all settlements from Monday to be completed only by the weekend,” said a top official from a big brokerage house.
The process is taking longer than usual as brokers had a streamlined process earlier when all securities were credited to their pool. With some units directly credited and some being sent to brokers, the process has got more tedious and lengthier, market sources said.
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