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T+1 Settlement Cycle For All Futures And Options Stocks From January: Stock Exchanges


Earlier, future and options stocks were to be transitioned to the T+1 settlement in two batches. (File)

New Delhi:

To bring in operational efficiency, stock exchanges on Wednesday said that all stocks, on which derivatives contracts are available, will be transitioned to the T+1 (trade plus one day) from January 2023.

Earlier, future and options (F&O) stocks were to be transitioned to the T+1 settlement in two batches — December 2022 and January 2023, according to a joint statement issued by infrastructure institutions (MIIs) — stock exchanges, clearing corporations and depositories.

T+1 means that trade-related settlements will need to be cleared one day of the actual transactions taking place.

In September last year, the Securities and Exchange Board of India (Sebi) permitted stock exchanges to introduce a T+1 from January 1, 2022, on any of the securities available in the equity segment.

After this, all MIIs issued a joint press release concerning the roadmap for the implementation of the T+1 settlement cycle. Accordingly, all listed stocks, across stock exchanges — BSE, NSE and MSE — were ranked in descending order based on daily capitalisation averaged for October 2021.

In the first phase, the bottom 100 stocks were made available for the introduction of T+1 settlement, from the trade date of February 25, this year based on the ranking arrived. Thereafter, from March onwards, on the last Friday (trade day) of every month, the next bottom 500 stocks from the list of stocks ranked, are being made available for introduction to T+1 settlement every month till January 2023.

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“To bring in operational efficiency and ease for participants, it has been now decided that all stocks on which derivatives contracts are available will be transitioned to T+1 settlement in a single batch i.e. in January 2023 instead of two separate batches,” the joint statement noted.

Accordingly, the stock exchanges will revise the original schedule for the transition of stocks to the T+1 settlement.

(Except for the headline, this story has not been edited by IHNS staff and is published from a syndicated feed.)

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