Sebi introduces T+1 settlement cycle on optional basis

SEBI has introduced an optional T+1 settlement cycle for the stock market.

It simply means if you have purchased a stock today, it will be there in your demat account by next working day (T+1). Currently the settlement time in Indian stock market is two working days. (T+2)

As per the current circular introduced by SEBI, there is flexibility to stock exchanges to offer either T+1 or T+2 settlement cycle for completion of share transactions (with some conditions like after giving an advance notice of at least one month regarding change in the settlement cycle, Read more Sebi introduces T+1 settlement cycle on optional basis to enhance liquidity).

The provisions of the circular come into effect from January 1, 2022.

The positive side of the change is that “less risk of default by brokers as less settlement time”. But the implementation might cause some initial hurdles for Foreign Portfolio Investors (FPI) because of time zone differences.

Disclaimer:

The views and investment tips expressed here are purely based on my intuitions out of the mathematical analysis done and current news. What suits you better is something to be decided by you. What is in fancy today may become outdated tomorrow. So above every recommendations, it’s your logical intuitions, investment objectives and risk tolerance that matters the most. After all, it’s your money at stake!!