Introduction of T+1 Rolling settlement on an optional basis

Great news sir. Hoping for swift action by zerodha like always. Some good news from Sebi even though it will come in effect from jan 2022 :hugs:

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I really want to read more about stock settlement. I have already read Varsity by Zerodha but I want to dive into more depth. Please recommend some resources.

Moreover I had a doubt that if T+1 settlement comes into action, will the 20% delivery margin go away ?

I also wanted to connect with you on LinkedIn please see if that is possible too.

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Hi, in case of btst trades dp charge is applied. But if shares gets credited on t+2, why this charge? Enlighten me.

In BTST transaction, the shares are first credited to your demat account and then debited. Hence the DP charges are applicable. You can check out this post to know how the BTST settlement process works.

Also this thing will Remove use of DIS SLIPS used by those who has Trading and Dmat Account in different Participants/Brokers.
Also I think that option to choose T+1 settlements between Exchanges is a Nightmare & hence SEBI should Force both either Choose T+1 or T+2 because this will create ruckus for the Exchange who chose T+1.

Hi
How are the settlements done in developed market like US and Europe?

T+2 and T+3

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Hello, Sir

Let say if T+1 settlement cycle is adopted by NSE then it will be applicable to all the scrips listed… So will BTST trades be applicable ???

@nithin @ShubhS9

You can still do BTST like you do now or do you mean BTST in trade-to-trade stocks?

Stocks in T2T segment can only be sold after shares are created to your demat account. So in T+1 settlement, the shares will be credited the next day and you can sell the shares the after.

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does intraday profit will settle on T+1 for all scrip in 2022?

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If India moves to a T+1 settlement in 2022, then yes.

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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 cap) will move to the T+1 settlement cycle on both exchanges simultaneously. From March 2022, 500 stocks ranked from the bottom will move to T+1 settlement cycle.

BSE being an older exchange has almost 5000 active companies listed and NSE has almost 1800. The ~3000 additional on BSE are lower market cap companies (mostly penny stocks). So what this means is that in around 10 months from Feb, or by Oct 2022, all the stocks in Indian markets will be on the T+1 settlement cycle.

How does an investor benefit?

  • When you sell stocks, you can withdraw the money in 1 day and not 2 days like before. Not being able to withdraw funds for 2 days, is the most asked question to our customer support. So hopefully this will reduce some support effort for our team. :slight_smile:
  • 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.

Why not T+0 or Instant settlement?

This question on why we can’t have an instant settlement in today’s world where UPI is powering almost 4billion bank transfers a month all settled instantly keeps coming up. What you need to understand is that unlike in bank transfers where there is one underlying that moves between two accounts - money, in the stock markets there are two legs. Stocks & money. While stocks are also in digital format and can potentially be moved instantly, it can’t really be moved instantly because of intraday trading.

The majority of trading volumes on the stock market is from intraday traders who are buying and selling stocks without taking or giving delivery of the stock. So if you did buy shares of a company from an intraday trader on the exchange, he might not have any shares to instantly transfer to your Demat account. Typically this intraday trader will exit his position before the end of the day and that obligation to deliver the stock will eventually land with someone who holds the stock. At the end of the day all such buy & sell obligations are crystallized, brokers transfer the stocks and money to the clearing corporation that settle the transaction. While instant settlement is impossible, even T+0 is extremely tough considering the time required for brokers to crystallize the obligations and then clearing corporations to settle.

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As per the attached list of stocks and their phasewise schedule for transition to T+1 , we’ll get the last set of stocks to move on 27th January 2023. The last ones to move to this arrangement is going to be all largecap stocks.

Read some article today that T+1 is going to be mandatory…and in phases, starting from the bottom 100 scrips by mcap.

Where to find t+1 settlement stock list?

Here is the first set of 100 stocks that will be settled T+1 that had gone live from the 25th of February 2022.

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I recently bought Sanofi India for getting a dividend. Is this stock on this T+1 or T+2 list?

And I also want to know, can I sell this stock on the Ex-dividend date? And still, I get a dividend or not.

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Sanofi India is under T+2 settlement. You can check this on BSE website, they display Group and Settlement Type for each stock on the stock quote page.

Also, you can sell the shares on ex-dividend date. You will still be eligible to receive dividends.

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You can sell any stock post ex-div and get dividend.

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