Exchanges are bracing to launch T+1 trading settlement from February 25, 2022. In a statement, the National Stock Exchange, jointly issued along with MIIs, said: “The T+1 settlement cycle will be implemented in a phased manner and the first list of securities with T+1 settlement cycle will begin from trade date starting from February 25, 2022.”

All listed stocks, across stock exchanges (BSE, NSE & MSEI), shall be ranked in descending order based on daily market capitalisation averaged for month of October 2021, the statement added. Based on the ranking arrived, the bottom 100 stocks should be available for introduction of T+1 settlement, from trade date February 25, 2022, the statement added.

T+1 the way to go

The Securities and Exchange Board of India, on September 7, 2021, permitted stock exchanges to introduce T+1 settlement cycle from January 1, 2022, on any of the securities available in the equity segment.

Today, if an investor buys or sells on Monday, he receives the money or shares on Wednesday (T+2 working days). With T+1 settlement, transfer will be on Tuesday itself.

“Where a stock is listed on multiple exchanges, the market capitalisation shall be calculated based on the price of stock at the stock exchange with highest trading volume during the above-mentioned period,” it said.

The list of stocks and exchanges where they are available for trading will be published on the website of all exchanges.

Inclusion in phased manner

From March 2022 onwards, on the last Friday (trade day) of every month, the next bottom 500 stocks from the list of stocks would be available for introduction to T+1 settlement. In case Friday is a trading holiday, the same shall be introduced on immediate next trading day, the NSE statement said.

SEBI shouldn’t stop with T+1 settlement

“Any new stock getting listed after October 2021 shall be added to list, as mentioned in above paras, based on the market capitalisation calculated on the basis of average trading price of 30 days after commencement of trading. In case, based on market capitalisation, the stock falls under the category (in terms of market capitalisation) of stocks already under T+1 settlement then that stock also becomes eligible for T+1 settlement and will be introduced in T+1 settlement cycle on the last Friday (trade day) of next month.”

Securities such as preference shares, warrants, right entitlements, partly paid shares and securities issued under differential voting rights (DVR) will be transitioned to T+1 settlement along with the stock of parent company.

Close-ended mutual fund schemes, debt securities (including corporate bonds), Sovereign Gold Bonds (SGB), government securities (G-Sec), Treasury bill (T-Bill) and State Development loan (SDL), Real estate investment trusts (REITs) and Infrastructure investment trusts (InvITs) and all other existing securities trading in normal segment or trade for trade segment and not covered under the above points such as exchange traded funds (ETFs), depository receipts (IDR), etc., would also be included in a phased manner.

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