Stock Market

SEBI extends deadline for implementation of T+1, settlement cycle to start from February 25, 2022

Market regulator SEBI has extended the deadline for implementation of the new arrangement of ‘T+1’ (trade and next day) on alternate basis for settlement of buy and sell of shares.

SEBI Settlement Cycle: Pay attention when investing in the stock market. There is important news for you. Market regulator SEBI has extended the deadline for implementation of the new arrangement of ‘T+1’ (trade and next day) on alternate basis for settlement of buy and sell of shares. The settlement cycle will now be applicable from February 25, 2022, instead of January 1, 2022. The purpose of this arrangement is to increase trading in the market. At present, it takes two business days (T+2) after the trading day to close the deals on the domestic stock exchanges.

T+1 will be applicable from 25 February 2022

Earlier the deadline for implementing T+1 was fixed as 1 January 2022. But now SEBI has extended this deadline to 25 February 2022, giving some relaxation. There was already a demand to extend the deadline. It was being said that there may be some problems in implementing the new system soon. This settlement plan is for shares. Earlier it was optional for exchanges, but now it will be mandatory.

Bottom 100 companies selected

This decision has been taken after meeting with Exchange, Clearing Corporation and Depositor in SEBI. SEBI has initially selected the bottom 100 companies in the market capitalization for T+1. On the last Friday of March, the bottom 500 companies can be placed in it. It is clear from this that there will be no T+1 in those companies where FPIs are invested in the long run. Earlier in September, SEBI had issued a circular, so it was kept as an alternative option, not a mandatory one. Now all exchanges will have to start this system from February 25.

There was a demand to reduce the settlement cycle

In fact, many such requests were coming to the market regulator SEBI, in which there was a demand to reduce the settlement cycle. Keeping these requests in mind, SEBI has prepared a new rule. SEBI has issued a circular stating that after discussions with market infrastructure institutions such as stock exchanges, clearing corporations and depositors, it has been decided that the stock exchange will have the facility to settle in T+1 or T+2 settlement cycle. Make any offer.

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