One of the biggest problems faced by the investors in the secondary market while dealing in physical securities is that of bad delivery arising out of various reasons. Based on the reasons, these bad deliveries are classified into two categories, namely;

Patawat (Settlement) Objections

The physical securities received in payout are required to be checked by the Members for good delivery as per the norms of good and bad delivery of documents prescribed by the SEBI. If the securities are not considered good delivery, the receiving Member has to participate in " Patawat Objection Cycle" given below:

• Transfer Deed is out of date.
• Cheques for the dividend adjustment for new shares where distinctive numbers are given in the BSE Notice is not enclosed.
• Stamp of the Registrar of Companies on the Transfer Deed is missing.
• Details like distinctive numbers, transferors names, etc. are not filled in the Transfer Deeds.
• Delivering Member's stamp on the reverse of the Transfer Deed is missing.
• Witness stamp or signature on Transfer Deed is missing.
• Signature of the transferor is missing.
• Death Certificate (in cases where one or more of the transferors is/ are deceased) is missing.

A penalty at the rate of Rs.100 per Delivery Order is recovered by BSE on the delivering Members for delivering shares, which are not in order.