Delivery Settlement applies to individual stock derivatives (not Index, which are cash settled). It considers all open futures positions after close of trading on expiry day and all in-the-money option contracts which are exercised and assigned. The final position at a clearing member is arrived at after netting the obligations of all clients/constituents/trading members clearing through the respective clearing member.

The source states that the clearing member is required to pay upfront margin to the clearing corporation. The margins shall be collected/adjusted from the liquid assets of a clearing member on a real-time basis.

A Trading cum Self-Clearing Member (SCM) has trading as well as clearing rights. They are permitted to clear and settle trades executed by them only, either on their own account or on account of their clients, but not for custodian participants. In contrast, a TCM can clear for custodian participants.

According to the section on Settlement dues, 'The clearing members and custodians shall pay to the clearing agency whatever is due to them for settlement of their transactions / positions. In turn, the clearing agency shall pay to the clearing members and custodians moneys payable to them for every settlement for their transactions / positions. This is based on the information provided by the Exchange or Clearing Agency.'

The stock broker shall not use the funds of any client for providing the margin trading facility to another client, even if the same is authorized by the first client. Permitted sources include own funds, banks, NBFCs, CPs, and loans from promoters/directors.