Bourses to kick off T+1 settlement cycle from Feb 25 in phased method

Stock exchanges will kick off the T+1 settlement system on February 25, 2022, beginning with the underside 100 shares by market capitalisation. Thereafter, from March 2022, on the final Friday (commerce day) of each month, the subsequent backside 500 shares from the record of shares by market capitalisation might be accessible for introduction to T+1 settlement.
“Any new stock getting listed after October 2021, will be added to list based on the market capitalisation calculated on the basis of average trading price of 30 days after commencement of trading,” the inventory exchanges mentioned in an announcement.

“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,” exchanges mentioned. In T+1, settlement of the commerce takes place in a single working day and the investor will get the cash on the next day. The transfer to T+1 won’t require giant operational or technical modifications by market individuals nor will it trigger fragmentation and threat to the core clearance and settlement ecosystem. In case, based mostly on market capitalisation, if the inventory falls underneath the class (when it comes to market capitalisation) of shares already underneath T+1 settlement then that inventory additionally turns into eligible for T+1 settlement and might be launched in T+1 settlement cycle on the final Friday (commerce day) of subsequent month, exchanges mentioned. On September 7, Sebi allowed exchanges to begin the T+1 system as an possibility instead of T+2. If it opts for the T+1 settlement cycle for a scrip, the inventory trade should mandatorily proceed with it for a minimal 6 months. Thereafter, if it intends to modify again to T+2, it should accomplish that by giving one month’s advance discover to the market. Any subsequent swap (from T+1 to T+2 or vice versa) might be topic to a minimal interval. A inventory trade could select to supply the T+1 settlement cycle on any of the scrips, after giving a minimum of one month’s advance discover to all stakeholders, together with the general public at giant. “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,” exchanges mentioned.
Foreign buyers had earlier written to Sebi and the Finance Ministry about operational points they’d face whereas working from totally different geographies.