Accordingly the Company was incorporated on July 3, 2001
to manage and operate the National
Clearing & Settlement System (NCSS) in a fully automated
electronic settlement system. NCSS
Live Operations were commenced from December 24, 2001. However,
the Company became fully
operational in the year 2003-04 by inducting and handling clearing
and settlement of all book-entry
securities through NCSS. Thereafter, any security which becomes
live in CDS, on ready status,
is accordingly inducted into the NCSS. |
| |
| The Operations of NCCPL are governed by
the following: |
 NCSS
Regulations 2003 |
| NCSS
Procedures 2003 |
| Clearing
House (Registration and Regulations) Rules 2005 |
| Companies
Ordinance, 1984 |
| |
| OVERVIEW OF NCSS |
As stated in earlier, NCSS is an electronic clearing
& settlement system which has been developed to replace the
individual clearing houses of Pakistan's three Stock Exchanges
by a single entity.
Trades and transactions settled by NCSS, under Balance Order
Multilateral Netting with T+2 and T+1 settlement cycle, are
of two types: |
| |
| 1. Exchange Trades/Exchange Transactions |
| 2. Non-Exchange Transactions |
| |
| 1. Exchange Trades / Transactions |
Exchange Trades are Locked-in
contracts between broker CMs executed through Exchange trading
system in the Regular Market.
Exchange Transactions
are Locked-in contracts between broker CMs executed through
Exchange Trading System in the Continues Funding System (CFS)
Market.
Moreover, net-buy or net sell position of broker CMs based on
their futures contracts at the close of Futures Contract Period
transmitted to NCSS for settlement.
2. Non-Exchange
Transactions are generated in NCSS based on underlying
Exchange Trades/Transactions and are classified into following:
– Broker to Broker (BTB) Delivery System
facilitates non-Exchange transaction between broker CMs of different
exchanges based on underlying exchange trader.
–
Institutional Delivery System (IDS) facilitates non-Exchange
transactions between broker CMs and non-broker CMs based on
underlying Continues Funding System (CFS).
–
Margin Financing (MF) facilitates Broker CMs to arrange
funds from other Broker/ Non Broker CMs based on their purchases. |
| |
| Type of Trades/Transactions on NCCS |
| |
 |
| |
| VALUE ADDED SERVICES |
| The National Clearing & Settlement System
(NCSS) provides significant relief to the respective clearing
houses of the three Stock Exchanges as well as Clearing Members
(CMs). This system facilitates the clearing & settlement
of all trades and transactions, carried out at all the three
Stock Exchanges, by way of providing following value added services
through a single settlement entity: |
| |
| 1. Cross Exchange Netting |
| Netting of securities and cash obligations of
trades and transactions of a CM having multiple memberships
aligned with his CM ID; Broker-to-Broker (BTB) transactions
between members of different Exchanges; and Institutional Delivery
System (IDS) transactions affirmed by non-broker CMs with members
of different Exchanges. |
| |
| 2. Broker-to-Broker Delivery System |
| BTB delivery module to facilitate Arbitrage Transactions
between broker CMs of different Exchanges; and transactions
done by a broker CM who is the member of an Exchange, on behalf
of the CM who is member of another Exchange. |
| |
| 3. Institutional Delivery System |
| IDS to facilitate non-broker CMs for direct settlement
of continuous funding system (CFS) transactions. Currently,
IDS functionality assists clearing and settlement of transactions
between broker and non-broker CMs based on their CFS transactions
only due to non-availability of RMS in NCSS. |
| |
| 4. Margin Financing Module |
| Margin Financing (MF) module to facilitate margin
trading whereby Broker CMs can arrange funds from other Broker/
Non Broker CMs based on their purchases. |
| |
| 5. Fully Automated Pay & Collect System |
Fully Automated Pay & Collect System to enable
automated money settlements;
same day credits to CMs; settlements net of clearing obligations,
squaring-up obligations and tariff etc; and single net settlement
for CMs who are members of more than one Stock Exchange. |
| |
| 6. Netting of Future Market Transactions
with Regular Market Trades |
| Clearing and settlement of net buy or net sell
positions of CMs in each security at the end of Future Contract
Period. |
| |
| 7. Tariff Collection through Pay &
Collect |
| Collection of tariff through Pay & Collect
system. Presently the tariff collections under this system are
made on monthly basis. |
| |
| |
