What is an auction?
The Exchange can initiate an auction in case the selling Trading Member is unable to deliver the shares, for various reasons such as short delivery, bad delivery and objections. The Exchange purchases the requisite quantity in the Auction Market and gives the delivery to the buying Trading Member. This process takes 5 days to complete and thus in case if you have a purchase position and the shares are not delivered by the opposite selling member, then there could be a delay in receiving the shares, until such time the Exchange completes the Auction process..
The securities are put up for auction by the Exchange on account of non-delivery of securities by the selling trading member to ensure that the buying trading member receives the securities due to him. The non-delivery by the trading member could arise on account of short delivery, bad deliveries not rectified and company objections not rectified by them. The Exchange purchases the requisite quantity in the Auction Market and gives them to the buying trading member. Therefore if the securities brought by the client are not delivered by the delivering member, they may be purchased in auction and may be delivered to you. Therefore there may be a slight delay in receiving the shares after pay out.
The Exchange purchases the requisite quantity in the Auction Market and gives them to the buying trading member. The shortages are met through auction process and the difference in price indicated in contract note and price received through auction is paid by member to the Exchange, which is then liable to be recovered from the client.
An auction is a mechanism utilised by the exchange to fullfil its obligation towards the buying trading members. Thus, in case of a settlement, where the selling trading members have delivered short, the exchange purchases the requisite quantity from the market and gives them to the original buying member.
An auction is a mechanism utilised by the exchange to fulfil its obligation towards the buying trading members. Thus, when the selling broker fails to deliver the shares, exchange conducts an open market purchase by way of open auction and the shares so bought through the auction are delivered to the buying broker.
