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T+1 Settlement Cycle To Protect Investors’ Interests: SEBI Chief

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T+1 Settlement Cycle To Protect Investors' Interests: SEBI Chief

SEBI chairman Ajay Tyagi has said that T+1 settlement cycle will protect investors’ interests

Securities and Exchange Board of India (SEBI) chief Ajay Tyagi has said that the decision to implement the trade plus one (T+1) settlement cycle in a phased manner beginning February 2022 will go a long way in protecting investors’ interest.

Apart from this, the markets regulator has taken a number of regulatory measures in the recent past towards investor protection, he said at a function at the India International Trade Fair.

These measures included introduction of upfront margin framework, risk-o-meter, e-KYC and protection of client collateral through pledge-repledge mechanism, Mr Tyagi added.

“The decision to implement T+1 (trade plus one) settlement in a phased manner beginning February 2022 will go a long way in protecting investors’ interest,” he said.

T+1 means that market trade-related settlements will need to be cleared within one day of the actual transactions taking place. Currently, trades on the Indian stock exchanges are settled in two working days after the transaction is done (T+2).

The stock exchanges – NSE and BSE – earlier this month announced that they will implement the T+1 settlement cycle in a phased manner starting February 25, with the bottom 100 stocks in terms of market value.

Thereafter, 500 stocks will be added based on the same market value criteria from the last Friday of March and so on every following month.

The announcement came after SEBI in September permitted stock exchanges to introduce T+1 settlement cycle from January 1, 2022 on any of the securities available in the equity segment.



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