Read on the application
Small and big investors investing in the stock market are going to get good news in the new year. If all goes well, immediate settlement will be implemented in the stock market by October 2024. After its implementation, the settlement will take place immediately after trading in the market. Currently trades are settled on “T+1” or one day after the trade commences. After China, India is the second country to settle trade in such a short period of time.
What is the plan: News agency Reuters quoted a Sebi source as saying that India’s market regulator hopes to implement faster settlement of stock market trades by October 2024. Immediate trade settlement for foreign investors would be optional, not mandatory, the source said. Sebi will initially implement settlement within one hour of trading, after a few months instant settlement will be implemented.
How investors will be affected: Currently if you buy or sell a share in the market, there is a delay in getting it into your demat account even though the process is completed. The settlement cycle is determined based on the series of shares. For example, if you bought or sold shares of a company during Tuesday trading, the settlement takes place on the trading day and the following trading day i.e. T+1.
In simple terms, the shares you bought or sold on Tuesday will be credited to your demat account on Wednesday itself. Some shares fall into T+2 category. This means that the shares you bought or sold on Tuesday will be credited in the next two trading days i.e. Thursday from the trading day. A scheme is now being worked out to reduce this period of share credit. With its implementation, share trading will become easier. Within minutes you can buy or sell shares.