Mumbai: The stock market finally moved to trade and a shorter cycle settlement from February 25 next year as an exchange has decided to adopt T + 1 system from that day.
Changeover for the short cycle will be gradually, starting with stocks with the lowest market capitalization move before they with a higher market value, according to shared broadcasts from NSE, BSE and other market intermediaries.
At present, the market follows T + 2 systems for all shares in the cash segment.
Under T + 2 system, the buyer gets shares he bought in his Demang account on the third business day, including trading days.
Likewise, the seller receives money to sell its shares on the third business day.
Under T + 1 system, shares and money will be credited by the next night which will provide an investor choice for other trade to roll out funds and shares faster.
Moving to the T + 1 system will be carried out almost 19 years after the Indian market has moved to the T + 2 settlement cycle of T + 3 cycles.
At present, most markets worldwide follow T + 2 systems, but technological advancements encourage exchanges to shorten the settlement cycle.
On September 7 this year, despite the strong resistance of several parts of market players, Sebi has decided to move to T + 1 cycle.
The rules that decide which stock will move to T + 1 cycle, and in what framework, the first will rank all shares registered in accordance with their market capitalization.
The last 100 in this list will move to T + 1 first cycle on February 25, 2022.
After that, on the last Friday of the month, the bottom of the next 500 shares will be added to the list, the word release.
As something stands now, stocks such as Steel Strips and Coromandel Agro products will enter T + 1 cycle in the first less well known batch, the release list by the Exchange shows.
On the other hand, blue-chips such as Reliance Industries, TCS and HDFC Bank will move to the shorter trading & settlement of the last cycle (12) batch on January 27, 2023.
Registered instruments such as closed mutual fund schemes end, debt seclusion including corporate bonds , sovereign gold bonds, Government Securities, Treasury Bills, Country Development Loans, Reits, Invits, ETFs, IDRs, etc., will also move to a new system from January 27, 2023.
Further release says that newly registered shares will have a cooling period 30 The day before it was added to the list.
Preferent shares, warrants, rights, DVRs, etc., will be added to the list along with the stock of the parent company.
On September 7, Sebi has asked all market infrastructure institutions (MIIC) to take the necessary steps to place the right system and procedure for the introduction of the smoothness of the T + 1.
Mii settlement cycle, which is on track to put all the processes needed in place , Monday said that they had set a road map to transition to trading & settlement of shorter cycles.
According to industry sources, under T + 1 cycle, technology-driven discount brokers will be in the advantage of more people who have not been a hug technology on a big road for routine operations.