Stock Market Shifts to T+1 Settlement Cycle

The Indian stock market shifted to the shorter and quicker T+1 or 'Trade plus 1' settlement cycle on Friday. In the first phase, 100 stocks based on the lowest market capitalisation on the NSE were put under the new settlement cycle. This means those transacting in shares falling under the T+1 settlement cycle will get their money or shares delivered within 24 hours. 
Henceforth, 500 stocks will be added under the new settlement system on last Friday of every month 
At present, trades on Indian stock exchanges are settled within two days after they take place, known as T+2 settlement. A shift to the T+1 system would result in settlements happening the next day, a move aimed at making the market more efficient by reducing the time between cutting a deal and its conclusion. 
Most global markets still follow the T+2 settlement system. The new norms have been introduced despite opposition from some foreign investors. T+1 should be a good move making settlement cycle shorter reducing margin requirement for clients with margin blocked for just one day, thereby increasing retail participation and investments coming to equity markets. 
T+1 settlement system will shorten the settlement cycle by a day reducing the risk of pay-in/pay-out defaults, lower margin requirements and give investors more liquidity with the availability of funds and securities. In April 2003, the regulator had shortened the settlement cycle from T+3 rolling settlement to T+2.



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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