Upcoming July 2019, 'interoperability
of Exchanges' (IO), kicks in. IQ allows a broker to clear and settle his trades
through a single clearing corporation. Today, the broker clear trades on NSE
through NSE’s Clearing Corporation (NCL) and BSE's via the Indian Clearing
Corporation Limited (ICCL).
What does this mean for you as a trader/ investor?
Today, if a client is buying
stock on NSE and selling the same stock on BSE, he’s essentially creating two
different delivery positions. First position where he’ll receive delivery of stocks
from NSE on and one where he's to give delivery of stocks to BSE.
Since the trades are currently cleared by the respective CCs, the positions
don’t get netted off.
From upcoming July 01, the above trade
will result in an 'Intraday' position with buy position in NSE netting off the
sell in BSE. This means if you spot a price difference for the same stock on
BSE and NSE, then you can essentially arbitrage this by initiating a buy
position in the stock in the exchange where it is trading cheaper and sell the
same in the exchange where it is trading higher.
While IQ is getting implemented,
Most broker‘s OMS/RMS are
still not supporting. So don't be surprised if such a feature isn't available
on Day 1.
Happy trading!