There is an important news for those investing in the stock market. All the major stock exchanges of the country and other market infrastructure institutions on Monday announced the T+1 system of settlement of shares. In a joint statement, all the exchanges and institutions said that they have prepared a blueprint for the T+1 system of settlement of shares and it will be implemented in a phased manner from February 25, 2022.
In T+1, T stands for “day of trading”. With the implementation of T+1 system, money will be credited to the investor’s account one day after selling the shares. Presently T+2 system is applicable for settlement of shares. That is, after two days of selling or trading the shares, money comes to the investor’s account. After the implementation of T+1 system, investors will now get money a day before if they sell the shares.
The T+1 system will be implemented in a phased manner, starting February 25, the statement said. In the first phase, this system will be implemented in the shares of the lowest 100 companies according to market capitalization. Then from March 2022 onwards 500 more stocks will be brought into this system.
All the Market Infrastructure Institutions (MIIs) have taken this decision jointly, the statement said. These MIIs include stock exchanges, clearing corporations and depositories.
Earlier, market regulator SEBI had allowed exchanges to introduce the T+1 system with any securities available in the equity segment with effect from January 1, 2022. According to the joint statement, all the listed shares on the stock exchanges (BSE, NSE and MSEI) will be ranked according to the decreasing market cap.