SEBI reduces auction shares settlement by a day

Our Bureau Mumbai | Updated on February 02, 2011

The SEBI has reduced the timeline for the auctioning of shares by one trading day, with effect from February 1. With this, the time involved in delivering shares to the buying broker by the selling broker in case of default due to short delivery will be brought down by one trading day.

Henceforth, all auction sessions will be conducted on the T+2 day and the respective auction settlement would be effected on the T+3 day.

In case, settlements for two different trading days (multiple settlements) happen on one day because of a bank holiday, auction for the earlier trading day would be done on that day and the auction for the next trading day would be shifted to the next day.

Earlier, the auction trading session for all short deliveries used to be conducted on the T+3 day and the settlement on the T+4 day.

For normal settlement, pay in and payout of securities and funds happen on the second trading day after the trade has been executed. Auction obligations are ascertained after completion of pay in and any shortfall in delivery is crystallised by the exchanges.

Published on February 02, 2011

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