Home / Markets / Stock Markets /  From Reliance, TCS to Adani: Top stocks to move into T+1 this week. What faster settlement means

Starting from Friday, January 27, India's stock market will move to a faster trading settlement cycle as it will switch to the T+1 system. The top Indian stocks from Reliance Industries Ltd (TIL) to Tata Consultancy Services (TCS) and Adani Enterprises, among others, will be settled on a ‘trade-plus-one-day’ timeline versus the earlier two-day process. 

T+1 means that market trade-related settlements will need to be cleared within one day of the actual transactions taking place.  “This will make India the first country in the world to go for such a quick settlement putting us ahead of the US. The T+1 settlement was proposed recently with implementation timelines of 24 months by the Securities Exchange Commission (SEC)," Manoj Dalmia Founder and Director, Proficient Equities Limited.

All large-cap and blue-chip companies will switch to the T+1 system on January 27. The switch to T+1 settlement is coming 20 years after the capital market regulator Securities Exchange Board of India (SEBI) in 2003 had reduced the settlement period from T+3 days to T+2 days. 

“To bring in operational efficiency and ease for market participants, it has been now decided that all stocks on which derivatives contracts are available will be transitioned to T+1 settlement in a single batch i.e., in January 2023 instead of two separate batches. Accordingly, Exchanges will revise the original schedule for transition of stocks to T+1 settlement and issue the circular informing the list of stocks to be transitioned in December 2022 and January 2023," as per the circular.

In September last year, the regular permitted stock exchanges to introduce a T 1 settlement cycle from January 1, 2022, on any of the securities available in the equity segment.

“This is a truly remarkable achievement as India will be the first market to achieve a complete T +1 trading settlement. A republic day gift to the nation. Even USA has not been able to achieve this yet. This should have a positive impact on trading volumes as the rolling of funds will be faster now. The faster settlement ensures faster liquidity for investors which should give equities investments an extra edge over other asset classes," said Divam Sharma, Founder at Green Portfolio, SEBI Registered Portfolio Management Service Provider.

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