All F&O stocks to be moved to T+1 settlement in January 2023

To bring operational efficiency and ease for market participants, the exchanges have decided to move all the stocks trading in F&O segment to T+1 settlement in single batch in January 2023.

As per the earlier schedule the stocks which are traded in F&O segment were to be moved to T+1 settlement in two bachs in December 2022 and January 2023. You can check the press release from the exchange here.

SEBI in September 2021 has published a circular permitting stock exchanges to introduce T+1 settlement in the equity segment. Following this, the exchanges have been migrating stocks to T+1 settlement in a phased manner on the last Friday of each month from February 2022, starting with stocks with lowest market cap. You can check out this post for more information.

How does an investor benefit?

When you sell stocks, you can withdraw the money in 1 day and not 2 days like before.

When you buy stocks, you get it to your Demat in 1 day, in case you want to pledge them for margins.

When you buy and then sell a stock within 2 days (before stock crediting your Demat), there is a short delivery & hence an auction penalty risk. Short delivery is when the person selling the shares fails to deliver the stock to you. If you have sold the stock and don’t have shares in your Demat, you will end up defaulting to deliver the stock as well. In which case you carry the risk of paying an auction penalty. This risk of 2 days reduces to just 1 day. To read more on short delivery and auction penalty, check this.

You can check the list of stocks that have so far been moved to the T+1 settlement here:

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