Question:
Bad deliveries are required to be reported to the Clearing Corporation within how many days of receipt?
Bad deliveries are required to be reported to the Clearing Corporation within how many days of receipt?
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To prevent physical delivery errors from delaying market settlement, members are given a strict 2-day window to report bad deliveries for resolution.
Updated On: Jun 22, 2026
- 1 day
- 2 days
- 3 days
- 5 days
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The Correct Option is B
Solution and Explanation
Step 1: Defining Bad Delivery:
A bad delivery occurs in the physical share environment when shares delivered by a seller are rejected due to technical discrepancies, such as signature mismatch, forged certificates, or incorrect transfer deeds.
Step 2: Checking Clearing Corporation Guidelines:
To maintain market stability and ensure timely settlement, any receiving member who detects a bad delivery must report it to the Clearing Corporation within a strict deadline to initiate rectification or an auction.
Step 3: Identifying the Reporting Window:
Standard operational guidelines specify that bad deliveries must be reported to the Clearing Corporation within 2 days (B) of receipt of the pay-out.
A bad delivery occurs in the physical share environment when shares delivered by a seller are rejected due to technical discrepancies, such as signature mismatch, forged certificates, or incorrect transfer deeds.
Step 2: Checking Clearing Corporation Guidelines:
To maintain market stability and ensure timely settlement, any receiving member who detects a bad delivery must report it to the Clearing Corporation within a strict deadline to initiate rectification or an auction.
Step 3: Identifying the Reporting Window:
Standard operational guidelines specify that bad deliveries must be reported to the Clearing Corporation within 2 days (B) of receipt of the pay-out.
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