Stock Exchanges to Rollout T+1 Settlement In Equities From 25th February

Stock exchanges said that they will introduce the T+1 settlement cycle for trading equity shares and other instruments in a phased manner, starting 25th February after receiving approval from the Securities and Exchange Board of India (SEBI) for a phase-wise implementation .
India will be one of the first few countries to shift to the T+1 cycle by 2022. The US also plans to shift to a one-day settlement cycle over two years. India’s phased implementation comes after the proposed switch to T+1 unsettled some market participants, especially foreign portfolio investors. 
“All listed stocks, across stock exchanges, shall be ranked in descending order based on daily market capitalization averaged for the month of October 2021. Where a stock is listed on multiple exchanges, the market capitalization shall be calculated based on the price of the stock at the stock exchange with highest trading volume during the above-mentioned period," the statement from the exchanges said.
Thus the bottom 100 stocks based on daily market capitalisation averaged in October will be brought under the new settlement system followed by 400 stocks in March. 
The last batch of stocks will be brought under the new system by 27th  January 2023. 
“Any new stock getting listed after October 2021 shall be added to the list based on the market capitalization calculated on the basis of the average trading price of 30 days after commencement of trading. In case, based on market capitalization, if the stock falls in the category (in terms of market capitalization) of stocks already under T+1 settlement, then that stock also becomes eligible for T+1 settlement and will be introduced in the T+1 settlement cycle on the last Friday (trade day) of next month," the exchanges said.
Securities such as preference shares, warrants, right entitlements, partly paid shares and securities issued under differential voting rights (DVR) will move to T+1 settlement along with the stock of the parent company.
All other securities such as closed-ended mutual funds, debt securities, including corporate bonds, government securities, REITs and InvITs, will be transitioned to the T+1 settlement cycle, along with the last scheduled batch of securities, the exchanges said.
Since the current Nifty 50 constituents will only move to T+1 cycle in the last batch (w.e.f 27 January 2023), the T+1 settlement will be a gradual process (mainly lower to higher market capitalization) and market observers expect no near term impact. 
The key stocks (NSE and BSE 500 constituents) will be part of the T+1 settlement cycle only after the end of November 2022. Going by the calculations, the first constituents from NSE or BSE 500 to move from the current T+2 to new T+1 settlement cycle will be from 25 Nov 2022.



To continue

Sign Up or Sign In


We are listening!

Solve the equation and enter in the Captcha field.

Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu