Скачать или смотреть Instant settlement of Indian trades to come in by Oct'24; Migration to 1-hour settlement by Mar’24

This video is in Hindi and covers the following topics:

Instant settlement of Indian trades to come in by Oct'24; Migration to 1-hour settlement by Mar’24
Instant settlement (T+0 Settlement) by Oct’24
Migration to one-hour settlement by March’24
T+0 (Instant Settlement) क्या है?
Investors को इसका क्या फायदा होगा?

Settlement is a two-way process which involves the transfer of funds and securities on the settlement date

A trade settlement is said to be complete once purchased securities of a listed company are delivered to the buyer and the seller gets the money.

On July 9, 1997, about 25 years ago, the National Stock Exchange (NSE) implemented the T+5 stock settlement mechanism

Earlier in 2003, the regulator had shortened the settlement cycle from T+3 rolling settlement to T+2

From February 25, 2022, India became only the second country after China to move to the T+1 stock settlement mechanism in a phased manner.  

In most other major economies trades are settled within two days.

Earlier this year, the US and Canada announced that the transition to T+1 will take place in May 2024.

The current cycle of T+1 means trade-related settlements happen within a day.

The migration to the T+1 cycle came into effect in January this year. From January 27, all top listed securities, which includes shares, exchange-traded funds (ETFs), real estate investment trusts (REITs), infrastructure investment trusts (InvITs), sovereign gold bond (SGB), government bonds, and corporate bonds trading in the equity segment was being settled on T+1 basis.

India became the second country in the world to start the T+1 settlement cycle in top-listed securities after China, bringing in operational efficiency, faster fund remittances, share delivery, and ease for stock market participants.

India's market regulator expects instant settlement of stock market trades to be implemented by October 2024, a source from the regulator told Reuters on Tuesday.

For foreign investors, the instant trade settlement would be optional and not mandatory, the source said.

To start, the regulator would implement settlement within one hour of the trade, with instant settlement coming some months later.

By March 2024 we hope to first move towards one hour settlement cycle, since exchanges and clearing corporations say they need more time to work on the systems for instant settlement

It obviously makes it easier for quicker buying and selling of shares in our markets (big boost towards the buying and selling of various mutual fund products).

It will improve cost efficiencies and transparency in the overall market, besides improving transparency and reducing the risk of fraud. Ensuring uniformity will also improve efficiencies.
The shorter settlement cycle means that the market regulator will not press for higher margin requirements—than existing ones—that brokerages mandate from their clients.

Give investors more liquidity with availability of funds and securities

ASBA-like settlement mechanism for secondary trades will go for pilot testing in December and will be up and running in January.

This is similar to the Application Supported by Blocked Amount (ASBA)-like facility that is operational in the primary market which ensures that investor money moves only when allotment happens.