CURRENT AFFAIRS

Detailed explanation-1: -India has become the second country after China to implement the T+1 stock settlement mechanism in a phased manner from 25 February. The system will be starting with select stocks and then gradually adding others to the fold.

Detailed explanation-2: -Have you noticed that after buying or selling a stock, bond, or mutual funds, you have to wait for two days for that stock to reflect in your Demat account or the fund to come in your account? Well, the period to do so, i.e., T + Day Settlement - will reduce to just one Day, i.e., T + 1 from T+2.

Detailed explanation-3: -After China, India will become the second country in the world to start the ‘trade-plus-one’ (T+1) settlement cycle in top listed securities today (January 27), bringing operational efficiency, faster fund remittances, share delivery, and ease for stock market participants.

Detailed explanation-4: -New SEBI T+1 Settlement New Rules Hence, T+1 would improve liquidity and reduce funds lock-in for clients. Accordingly, SEBI has announced optional rolling settlement in stocks effective from 01-Jan 2022. Stock exchanges will have the discretion to select stocks to offer T+1 settlement cycle on.

Detailed explanation-5: -Initially, SEBI introduced the framework for certain scrips on T+5 basis (in 5 business days from date of trade) and then expanded it to all scrips by December 2001. As the new settlement process settled smoothly, SEBI shortened the cycle to T+3 in April 2002 and further to T+2 from April 2003 and now to T+1.