Change in settlement cycle for all securities from Friday - 27th January 2023

[MayurBennadi]

From 25th February 2022 onwards exchanges have been migrating stocks to T+1 settlement in a phased manner starting with stocks with the lowest market cap. From 27th January 2023 onwards, the final batch of securities including stocks, ETFs, debt instruments, REITs, and InvITs will be moving to the T+1 settlement cycle.

How does this impact me?

Due to a change in the settlement cycle, any of these stocks bought on Wednesday, 25th January 2023, will not be available for selling on Friday, 27th January 2023 due to the risk of short delivery and subsequent auction penalty which can be up to 20%. They will be settled by the exchange on Monday as per the old T+2 settlement cycle and will be available for selling on Monday.

Stocks bought on Friday will be settled as per their new settlement cycle, T+1, and will be available for selling on Monday.

We’ve added this Nudge on Kite explaining the same:

You can learn more about the T+1 settlement cycle here:

Introduction of T+1 Rolling settlement on an optional basis

India will be the second large market after China to implement the T+1 settlement cycle of stocks. Most markets in the world are in the T+2 settlement cycle. What this means is that when you buy stocks, it hits your Demat account after 2 days, and similarly, when you sell stocks you get to withdraw the funds after 2 days. This, 2 days will now become 1 day. Here is the press release from the exchanges. What it says is that starting Feb 25th, 2022, 100 stocks (starting with the lowest market ca…

When can I withdraw the credit received from selling these stocks?

The credit received from selling these T1 settled stocks will be available for withdrawal from the next day itself, that is on T+1.

[Kana_Lord]

So now BTST will no longer be considered BTST, but be considered normal? am I right?
So if I buy shares on Monday evening and sell them on Tue morning , they would have been settled and not be considered BTST, am I right?

[sunny_dhar]

Can we sell the share on the morning of T+1th day or we need the stock to ist get credicted to our account? Context is related to auction penalty.

[nithin]

@Kana_Lord

So now BTST will no longer be considered BTST, but be considered normal? am I right?
So if I buy shares on Monday evening and sell them on Tue morning , they would have been settled and not be considered BTST, am I right?

Even now, when BTST happens, the stocks are first settled to the demat and then debited on T+2.

Going forward shares will get credited on T+1 and then debited before EOD on T+1.

[nithin]

@sunny_dhar

Can we sell the share on the morning of T+1th day or we need the stock to ist get credicted to our account? Context is related to auction penalty.

To avoid an auction penalty, you will still need to wait for it to be credited to your demat. By the way, concerning the auction penalty, we are doing something about this.

You can now participate in auction markets

We will be announcing this publicly today.

[saimoorthi]

@MayurBennadi Sir, I’m still confused about it. So please clarify my query with my today scenario, i bought today HDFCAMC and Sell GTT created automatically due to i set the target of 2% while placing the buy order. Now my Sell GTT order active at 1957.30. If HDFCAMC reached such level on 27th morning itself, what would happen to my stock.

[ShubhS9]

@saimoorthi

Sir, I’m still confused about it. So please clarify my query with my today scenario, i bought today HDFCAMC and Sell GTT created automatically due to i set the target of 2% while placing the buy order. Now my Sell GTT order active at 1957.30. If HDFCAMC reached such level on 27th morning itself, what would happen to my stock.

If the GTT is triggered on Friday, the order will be rejected. If you’ve bought any of the stocks that are moving to T+1 settlement, it’ll not be available for selling on Friday, you will be able to sell on Monday.

[harish1990]

Hi sir , yestaday i kept one level 41800 CE ,For BTST ,But it got executed by 3:30 PM And i got loss of 3100/-Rs , kindly plz help me

[saimoorthi]

I understand. Systematically, it won’t be executed. But why are SEBI and NSE making such regulations? Just imagine, on the 27th (T1), if it’s gone to 5-6% profit, but technically I can’t exit. At the same time, on the 30th (T2), if it’s open LC or even lower than my entry point, I’ll definitely be in the red and will need to wait some more days or weeks to exit with a profit. Don’t you think it’s not good for us or anything else involved?

[saimoorthi]

@saimoorthi

Now my Sell GTT order active at 1957.30.

As expected, it’s touched my target 1957.30 but now full reversal. I don’t know what kind of regulations.