Indian Stock Markets Migrating to T+1 Settlement Cycle

India will become the first major economy to move to a T+1(trade plus one) market settlement cycle when it finally makes the transition on  January 27. The Chinese market is currently partly T+1. With the move, all stock settlements will be done the next day, making financial transactions faster in the stock market.

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The Current Scenario:

Currently the market follows a T+2 settlement cycle, which means the investors receive shares or dividends as well as bonus shares in their accounts within two days after the transaction.

What The T Refers:

T refers to the trading day. Starting January 27 all large-cap and blue-chip companies will switch to the T+1 system. A T+1 cycle will mean that transfers will be completed the very next day and result in shorter waiting times as well as reduced liquidity risks for traders and investors.

What is T+1 Settlement Cycle: