Inclusion of shares will take place on the last Friday (trading day) of each month. In the event that the respective day is a public holiday, it will be executed immediately on the following trading day.

Two months after the market regulator allowed exchanges to offer a shorter settlement cycle for traded stocks, market intermediaries gave a formal roadmap for a shorter settlement cycle of T + 1 (plus trading). 1 day). On Monday, market infrastructure institutions (exchanges, clearing houses and custodians) agreed to implement the T + 1 securities settlement cycle from February 25. The new settlement cycle will be launched gradually.

Under the new cycle, all market-related transactions and settlements will be processed within one day of the actual trade. Currently, exchanges follow the T + 2 settlement cycle (trading plus two days), in which trades are settled within two business days of the trade.

“The T + 1 settlement appears at first glance to be a good measure to shorten the settlement cycle, reduce margin requirements for customers, as the margin is locked in for a single day, thus increasing retailer participation and investments in stock markets, ”Anupam Agal, COO, Motilal Oswal Financial Services, told FE.

Exchanges and custodians in a joint statement said on Monday, based on the average daily market capitalization in October 2021, the top 100 stocks from the bottom will be included in the new settlement cycle from February 2022. The next 500 stocks from the bottom will be included from March 2022. The last batch of titles will be completed on January 23, 2023.

A series of large cap companies, including RIL, HDFC Bank, Axis Bank, ITC, DRL, Titan, TCS and Bajaj Twins, will be included in the T + 1 settlement cycle from January 27, 2023.

Inclusion of shares will take place on the last Friday (trading day) of each month. In the event that the respective day is a public holiday, it will be executed immediately on the following trading day. “The process and other technical details would be clear once the first phase of actions moved to the T + 1 settlement in February,” Agal said.

New companies entering the stock exchanges after October 2021 will be included in the list, given their daily market capitalization calculated based on the average script trading price after 30 days of trading start.

According to the statement, in the event that on the basis of market capitalization the share falls into the category (in terms of market capitalization) of shares already settled in T + 1, then that share also becomes eligible for settlement in T + 1 and will be introduced into the T + 1 settlement cycle on the last Friday (trading day) of the following month.

This will also apply to a new share listed due to an initial public offering, a corporate action or for any other reason, and the transition date will be announced jointly by all stock exchanges on which the share is available. negotiation, according to the press release.

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