T+1 Settlement Cycle may Apply From Feb 25, 2022

T+1 Settlement Cycle may Apply From 25th February 2022

From February 25, Indian stock exchanges will implement the T+1 settlement cycle (trade plus one day) progressively.

Upon the T+1 settlement date, the bottom 100 stocks based on market capitalization will shift. From March onward, 500 stocks will shift from the bottom every last Friday of the month, according to the National Stock Exchange (NSE).

One day after the transaction, the settlement will need to clear. As a result, the buyer of stocks could receive securities in a Demat account the following day while the seller of stocks could receive funds in a bank account the following day.

“THE THREE MOST IMPORTANT KEYS IN INVESTING ARE MARGIN OF SAFTEY. “

On the Indian stock exchanges, trades are settled within two working days after a transaction is completed (T+2).

To reduce margin requirements, the market regulator Sebi launched an optional T+1 settlement system in September. Exchanges received an option from the market regulator of implementing the T+1 settlement or continuing to use the T+2 mechanism.

India will be the first country to switch to a T+1 cycle by 2022 as a result of the change. Over the next two years, the US plans to switch to a one-day settlement cycle. Several market participants, especially foreign portfolio investors, have expressed concerns regarding India’s proposed switch to T+1.