T + 1 settlement for the 100 lowest stocks from February 25

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Market infrastructure institutions (IMIs), including exchanges, clearing houses and custodians, have decided to start the first phase of the T + 1 settlement cycle from February 25, 2022.

In a statement, the MIIs state: “The T + 1 settlement cycle will be phased in and the first list of securities with a T + 1 settlement cycle will start from the trade date from February 25th. 2022. “

In September this year, the market regulator Securities and Exchange Board of India (SEBI) authorized the exchanges to introduce a T + 1 settlement cycle from January 1, 2022 on all securities available in the equity segment.

In a circular, SEBI states: “It has been decided to leave the stock exchanges the flexibility to offer a T + 1 or T + 2 settlement cycle. As a result, an exchange may choose to offer a T + 1 settlement cycle on one of the scrips, after giving at least one month’s notice, regarding the change in the settlement cycle, to all stakeholders, including the general public, and also disseminating them on its website.

However, after opting for a T + 1 settlement cycle for a script, SEBI indicates that the exchange must necessarily continue with the same for at least six months. “After that, if the exchange intends to return to the T + 2 settlement cycle, it can do so by giving the market one month’s notice,” the market regulator said. (Read: Exchanges may offer T + 1 or T + 2 sliding settlement on an optional basis)

Here is the schedule of securities to be transferred to T + 1 settlement:

1. All publicly traded stocks (BSE, NSE and MSEI) will be ranked in descending order based on the average daily market capitalization for October 2021.

2. When the share is listed on more than one stock exchange, the market capitalization will be calculated based on the price of the share on the exchange with the highest trading volume during the above-mentioned period.

3. The list of stocks and exchanges where they are available for trading is published on the website of all exchanges.

4. Based on the ranking mentioned above, the last 100 shares will be available for the introduction of the T + 1 settlement, from the trade date of February 25, 2022.

5. Thereafter, from March 2022, on the last Friday (trading day) of each month, the next 500 lowest stocks from the above-mentioned list will be available for introduction to T + 1 settlement. If Friday is a public holiday, it will be introduced on the following trading day.

6. Any new shares listed after October 2021 will be added to the list, as mentioned in the paragraphs above, on the basis of the market capitalization calculated on the basis of the average price for the 30 days after the start of trading.

In the event that, on the basis of market capitalization, if the share falls within the category (in terms of market capitalization) of shares already settled in T + 1, then this share also becomes eligible for settlement in T + 1 and will be introduced into the T + 1 Settlement Cycle on the last Friday (trading day) of the following month.

7. The new listed shares may be due to an initial public offering (IPO), a securities transaction or any other reason that would be processed as mentioned in point (6) and the transition date will be announced jointly by all the stock exchanges on which the actions are available. for trade.

8. Securities such as preferred shares, warrants, rights, partially paid-up shares and securities issued by virtue of differential voting rights (DVR) will be transferred in settlement T + 1 with the shares of the parent company.

9. All other securities listed below in the equity segment of the exchange will move to the T + 1 settlement cycle with the last expected batch of securities as determined in point (6) above for the transition to the settlement cycle T + 1

a. Closed mutual funds

b. Debt securities (including corporate bonds)

vs. Sovereign Gold Bonds (SGB)

D. Government bonds (G-Sec), treasury bills (T-Bill) and government development loan (SDL)

e. Real Estate Investment Trust (REIT)

F. Infrastructure Investment Fund (InvIT)

g. All other existing securities traded in the normal segment or the trade-for-trade segment and not covered by the above points, such as exchange-traded funds (ETFs) and certificates of deposit (IDRs).

“Any security listed after the trade date of the last scheduled batch of securities based on the ranking arrived as mentioned in the above paragraphs will be directly entered with the T + 1 settlement cycle,” say MIIs.


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