- From February 25, 2022, India has become the second country after China to implement T+1 stock settlement mechanism in a phased manner. The system will be starting with select stocks and then gradually adding others to the fold.
- Instruction regarding this was issued by SEBI on January 01, 2022. Before this, the settlement period of stocks in India was T+2, i.e. two days after the actual buy/selling of stock.
- T means the trade/transaction day i.e. the day on which stock is brought/sold. and here T+1 means that the actual stock settlement will happen on next day i.e +1 day. Ex: You buy a stock on Monday, you will get it in your Demat account Tuesday.
Points to remember:
- SEBI has introduced what settlement period of stocks from February 25, 2022?- T+1
- India is the ___ country to implement the T+1 settlement of Stock.- Second
- FIrst country to implement the T+1 settlement of stock?- China
Source: economic times and Outlook India
- SEBI introduced the present T+2 settlement in April 2003. Before that settlement of T+3 was followed by stock exchanges.
- Stock exchanges like BSE and NSE have selected, the bottom 100 stocks based on market cap that will be settled using the T+1 mechanism starting February 25.
- Thereafter, 500 more stocks will be added every last Friday of subsequent months, until every stock is placed under the new settlement system.