Stock Exchanges Announce Shift To T+1 Settlement Cycle



Stock Exchanges Announce Shift To T+1 Settlement Cycle

Stock markets have announced their switch to T+1 trade settlement cycle

Stock exchanges and other market related institutions on Monday announced the switch to trade plus one day or T+1 settlement cycle.

In a joint statement, the market players noted that they have come out with a roadmap for the implementation of T+1 settlement cycle, wherein the mechanism will be introduced in a phased manner from February 25, 2022.

Once the T+1 cycle comes into effect, the market trade-related settlements will need to be cleared within one day of the actual transactions taking place.

As of now, trades on the Indian stock exchanges are settled in two working days after the transaction is done (T+2).

The settlement cycle will be implemented in a phased manner and will apply only to the bottom 100 companies starting February 25, and from March 2022 onwards, the next bottom 500 stocks will be available for introduction to T+1 settlement, said the joint statement.

The decision has been taken by market Infrastructure Institutions or MIIs — stock exchanges, clearing corporations and depositories.

This comes after markets regulator SEBI in September this year had permitted stock exchanges to introduce T+1 settlement cycle from January 1, 2022 on any of the securities available in the equity segment.

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