NSE and BSE, the two main stock exchanges in India, will start implementing the new T+1 settlement system from February 25, 2022.
The complete transition of all securities to T+1 system will take place by January 27, 2023.
Initially, securities which are less liquid and have a very small market cap will make the transition to T+1 settlement regime.
The securities are ranked based on its market cap and the bottom 100 stocks will be moved to T+1 settlement system from February 25.
From March 2022, on the last trading Friday of every month, the next bottom 500 stocks with lower market cap from the list shall be moved to T+1 settlement system.
All securities of the key benchmark indices will enter T+1 regime in January 2023. Hence, the transition is less likely to affect the institutional investors.
Benefits of T+1 settlement system for Flattrade clients
- The new rule will make settlement cycle shorter.
- Improved liquidity in the market.
- It will reduce margin requirement for clients.
- Required margin money will be blocked for only one day.
- It will lead to increased retail participation and more investments coming to the equity markets.