Effortless Clearing: NSDL's Auto DOs Simplify Delivery Instructions
With NSDL’s Automatic Delivery Out Instructions (Auto DOs), Clearing Corporations can automatically generate instructions from CM Pool Accounts to CM Delivery Accounts. Authorised Clearing Members benefit as the Auto DOs are generated when delivery obligations are downloaded. This means these members need not provide separate delivery-out instruction forms for Participant Pay-ins to the Clearing Corporation. This automated process eliminates the need for Clearing Members to manually issue delivery-out instruction forms to Participants for Clearing Corporation Pay-ins. They can effortlessly access Auto DOs through downloads from the Clearing Corporation, Auto DO Reports from Participants or the SPEED facility on the internet.
How Does Auto DOs Work For Shares With Multiple ISINs?
Auto DOs are generated specifically for the main ISIN (International Securities Identification Number). For instance, a Clearing Member needs to deliver 1000 shares of a company like L&T for Pay-in. If they have 600 shares under one ISIN (like INE018A01014) and 400 shares under another (like INE018A01022) for L&T, the Auto DO will be created for the entire 1000 shares under the main ISIN (INE018A01014).
Delivery-Out Instruction Form Need To Be Sent To DP For Specific ISIN Shares
If the Clearing Member wishes to deliver shares under a different ISIN than the one for which the Auto DO is generated, they will need to cancel the Auto DO and provide a Delivery-out Instruction form to their DP for the specific ISIN they want to deliver. This process ensures that the right shares are delivered as required.
When To Use Irreversible Delivery-Out (IDO)
IDO (Irreversible Delivery-out) refers to an instruction given by beneficial owners or Clearing Member to their DP to transfer securities from their demat account to another account. Auto DOs can be cancelled or modified by Clearing Members if needed, unlike IDOs, which are irreversible once executed.
- If an IDO is sent before Auto DO generation, Clearing Members need to instruct the DP to cancel the matching Auto DO. They should also submit a Delivery-out Instruction form for the remaining quantity.
- If an IDO is sent after an Auto DO is generated, Clearing Members must cancel the Auto DO before proceeding with the IDO. Also, they need to provide a Delivery-out Instruction form for the remaining quantity to the Participant
IDOs Are Commonly Used For
- Settlement
- Margin payments
- Exemptions
- Transferring securities to another entity
Auto DOs Are Generated Solely For One CM Pool Account
Auto DOs are generated solely for the CM Pool Account designated for receiving Pay-out at the time of Auto DO generation. Clearing Members should monitor delivery instructions for Pay-in carefully, as securities might be in both CM Pool Accounts during the shift. Clearing members must provide Inter-settlement Instructions to Participants for securities located in another settlement, following standard protocol. Participants can generate separate reports from the DPM for both Auto DOs as well as manual DOs.
Existing DO rules, such as validity until the NSDL deadline and partial delivery for insufficient balance, also apply to Auto DOs.
