Backwardation Charge
So far we have noticed that, the Forwardation charge shall be paid by the buyer to the
seller. The other kind of situation may be possible, where the seller has to pay to the
buyer. This is called backwardation charge. When the buyer has got sufficient cash to
purchase shares, but the seller not in a position to deliver the Share Certificate, then the
seller has to pay backwardation charge on the settlement date, towards postponing the
delivery of Share Certificates.
Faceless
If shares sales and purchases are done through brokers, the sellers and purchasers may
not come into contact with each other on the settlement date, and the transaction is stated
to be 'faceless'.
Book Closure date
While purchasing securities in the secondary market, one must also get a transfer deed
duly signed by the seller. The details of transfer of share must be sent to the company,
before it closes the records on the book closure date. Then only, the holder of securities
becomes eligible for the benefits announced by the company. To prevent possible
problems, a company will announce the closure date, well in advance.
Good deliveries
To consider a security as good delivery, it must have the following details:
- It must be accompanied by a transfer deed
- Certified by the company or by the stock exchange
- Full name and address of the transferee
- Distinctive printed number
- Date of certification
- Payment of stamp duty
- Payment of transfer fees
- Legible and not spoiled
In the absence of the above details it is considered a bad delivery.