CLARIFICATION ON HANDLING OF CLIENTS' SECURITIES BY TRADING MEMBERS (TM) / CLEARING MEMBERS (CM):

1. If the client fulfills his/her funds obligation within five trading days after the pay-out, TM/CM can release the pledge within five trading days after the pay-out so that the securities are available to the client as free balance.
2. If the client does not fulfill its funds obligation, TM / CM shall dispose off such unpaid securities in the market within five trading days after the pay-out and can invoke the pledge within five trading days after the pay-out.
3. In case, such pledge is neither invoked nor released, the pledge on securities shall be auto released at EOD of seventh trading day after the pay-out and the securities shall be available to the client as free balance without encumbrance.

Example: TM / CM transfers the pay-out securities to its unpaid client for the settlement having settlement day (i.e. pay-out day) on Monday where CUSPA Auto pledge is created instantly. Assuming there is no trading holiday in between except Saturday and Sunday,

• TM / CM can release the pledge securities by next Monday EOD.
• TM / CM can invoke the pledge securities by next Monday EOD.
• In case, pledge is neither invoked nor released, the pledge on securities shall be auto released at EOD of next Wednesday.