SEBI Set up Panel to Analyse the Shift of Trade Settlement Cycle from T+2 to T+1


India (SEBI) has set up a panel of experts

To analyse the process of shifting India’s

Trade settlement cycle from the current

T+2 (Trade plus 2 days) to T+1 (Trade

Plus 1 day).

• The panel consists of experts from

Exchanges, clearing corporations and

Depositories.

•The shift to T+1 will reduce the

Settlement time and risk involved and

Increase the liquidity and trade

Turnove.

The Securities and Exchange Board of Key Points:

i.Trade settlement cycle refers to the

time within which brokers have to pay full money and take delivery of stocks.

ii.T is the transaction date and the

abbreviations T+1, T+2, and T+3 refers to

the settlement dates of security

transactions that occur on a transaction

date plus 1 day, plus 2 days and plus 3

days.

ii.In the case of T+1 settlement, the

shares would be transferred to the

buyer’s Demat account after the

transaction day (i.e the next day).

iv.Currently, the trades are settled within 2 days after the transaction day. India Made a transition from T+3 to T+2 in 2003.

v.The transition to T+1 will affect the

Foreign Portfolio Investments due to the

Time difference.

About Securities and Exchange Board of India (SEBI)

Establishment 1992 in accordance with

The SEBI Act, 1992.

Headquarters Mumbai, Maharashtra

Chairman – Ajay Tyagi

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