SEBI introduces T+1 settlement cycle, to shorten time span for share transactions

The Securities and Exchange Board of India (SEBI) has proposed a ‘Trade-plus-one’ (T+1) settlement cycle from January 1. In this options equity trades will get settled the day after the transaction vs in 2 days as per the cycle right now.

Under T+1, the buyer would get the shares in the Demat account and the seller the sale proceeds the day after the trade. Sebi said in a circular that stock exchanges may choose to offer the T+1 settlement cycle on any of the stocks, after giving a notice of at least one month on the change to all stakeholders.

The regulatory change has been adopted after the market regulator received requests from various stakeholders to further shorten the settlement cycle. At present, trades are settled two working days after the transaction is done. India moved to the T+2 settlement cycle from the T+3 cycle in April 2003.