Sign In
Learn bits
Economy
Mahesh

08/09/23 06:38 AM IST

One-hour trade settlement

In News
  • Securities and Exchange Board of India (SEBI), which had in July announced it was working to launch real-time settlement of trades, is now planning to implement one-hour settlement of trades first.
Trade settlement
  • Trade settlement is a critical process in the financial markets that involves the transfer of funds and securities between parties involved in a trade.
  • It ensures that the buyer receives the purchased securities, and the seller receives the agreed-upon funds.
  • In the context of securities trading, this settlement process finalizes the transaction.
T+1 Settlement Cycle
  • In January 2023, India adopted the T+1 settlement cycle, where T represents the trade date.
  • This means that trade-related settlements occur within one business day or 24 hours of the actual transaction.
  • India became the second country, after China, to implement the T+1 settlement cycle in top-listed securities.
  • This transition brought several advantages, including increased operational efficiency, faster fund transfers, prompt share delivery, and improved convenience for participants in the stock market.
Benefits
  • Under the current T+1 settlement cycle, if an investor sells securities, the money gets credited into the person’s account the next day.
  • In one-hour settlement, if an investor sells a share, the money will be credited to their account in an hour, and the buyer will get the shares in their demat account within an hour.
  • Reducing the settlement time can mitigate counterparty and market risk, enhancing overall market stability.
  • Investors will appreciate the swifter access to their funds and securities, making the market more user-friendly.
Source- Indian Express

More Related Current Affairs View All

17 Jan

Groundwater contamination in India

'Of the 15,239 groundwater samples collected from across the country for testing, 19.8% samples had nitrates — nitrogenous compounds — above safe limits though it must

Read More

17 Jan

Draft data protection rules

'The Ministry of Electronics and Information Technology on January 3, 2025, released the the draft rules for implementing the Digital Personal Data Protection (DPDP) Act, 2023 &mda

Read More

16 Jan

INS Surat, INS Nilgiri and INS Vaghsheer commissioned

'PM Modi dedicated three frontline naval combatants to the nation on their commissioning.' The naval combatants – INS Surat, INS Nilgiri and INS Vaghsheer --were commissio

Read More

India’s First Ai-Driven Magazine Generator

Generate Your Custom Current Affairs Magazine using our AI in just 3 steps