Previously, futures and options stocks were transferred to T+1 settlement in two batches. (document)

New Delhi:

To improve operational efficiency, the stock exchange said on that all stocks offering derivatives contracts will transition to a T+1 (trade plus one day) settlement cycle from January 2023.

Earlier, futures and options (F&O) stocks will be transitioned to T+1 settlement in two tranches – December 2022, according to a joint statement issued by the market infrastructures (MII) – stock exchanges, clearing firms and January 2023 and depository.

T+1 means that settlements related to market transactions will need to be cleared within one day of the actual transaction taking place.

In September last year, the Securities and Exchange Board of India (Sebi) allowed stock exchanges to introduce a T+1 settlement cycle for any securities in the equities segment from January 1, 2022.

Since then, various information industry ministries have issued a joint press release on the roadmap for the implementation of the T+1 settlement cycle. Hence, listed stocks on all stock exchanges – BSE, NSE and MSE – are sorted in descending order based on average daily market capitalization in October 2021.

In the first stage, the last stocks that are settled on T+1 will be introduced, starting from the trading of February 25, and arriving according to the ranking of the current year. After that, starting from March, on the last Friday (trading day) of each month, T+1 settlement can be introduced for the bottom 500 stocks every month until January 2023.

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“In order to improve operational and convenience for market participants, it has now been decided that all stocks that can use derivatives contracts will transition to T+1 settlement in one lump sum, that is, in January 2023, rather than in two tranches,” United statement stated.

Accordingly, the exchange will modify the original timetable for the conversion of stocks to T+1 settlement.

(Aside from the title, this story is unedited by NDTV staff and published via a syndicated feed.)

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