What is the T+1 settlement cycle? What are the changes involved?

From Jan 1st, 2022, SEBI has permitted the stock exchanges to introduce a T+1 settlement cycle for securities available in the equity segment. So trades executed on Monday, will be settled in your account on Tuesday. 

It will be implemented in a phased manner, as follows:
  • From Feb 25th, 2022,  the first list of stocks will move to the T+1 trade settlement cycle. This will include 100 stocks with the lowest market capitalisation.
  • On the last Friday (trade day) of every month from March 2022, stocks will be shifted to the T+1 settlement cycle in multiples of 500 (with the lowest market capitalisation).
  • Any stock newly listed after Oct 2021, will transition based on its market capitalisation which will be calculated based on the average trade price of 30 days from the commencement of trading.
  • Preference shares, warrants, rights entitlements, partly paid-up shares and securities issued under Differential Voting Rights (DVR) will transition to the T+1 settlement cycle along with the stock of its parent company.

For more information, check out the circulars issued by NSE and BSE.  

You can also view the security-wise transition list.

* Liquidation of unpaid stock will be one day in advance as compared to the current time frame.

* MTF marking cut-off on T+1 will be at 12:00 p.m.

* BTST will be available only on the trading day.

* Interest on due debits will be from the End Of the Day (EOD) on T+1.

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