What will happen if the stocks I bought under MTF is not delivered on the payout date?
When the shares bought under MTF are not delivered by the clearing corporation on T+1 date, in the payout settlement, those shares are either expected to be settled in Auction Normal settlement or a corresponding auction credit is expected to be received. On the payout date, if the stocks are not received, then the purchase position that was marked in MTF will be reversed from MTF and posted to Normal segment.
This can be seen in MTF statement for the day, which will carry a liquidation transaction to reverse the purchase position.
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