The Hindu : T+2 rolling settlement from April 1

Online edition of India's National Newspaper
Saturday, Jan 04, 2003

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Business

T+2 rolling settlement from April 1

MUMBAI JAN. 3. The Securities and Exchange Board of India will introduce T+2 rolling settlement cycle on the stock exchanges from April 1 to reduce risks in the capital market and protect investors' interest.

The market regulator would issue separate instructions to intermediaries and exchanges shortly and take steps to ensure smooth transition from T+3 cycle to T+2 settlement mechanism by widening use of electronic fund transfer (ETF), straight through processing (STP) and issue of electronic contract notes, a SEBI release said here today.

Under the T+2 cycle, the conformation for institutional trades by custodians should be done by 11 AM on T+1 basis, the release said.

A provision would be made for "exceptional window'' to deal with late confirmation of institutional trades, it said adding the time limit and additional charges for this window would be decided by the exchanges.

The exchanges, clearing houses and corporations would have to execute the securities pay-out and funds on T+2 basis for depositories and clearing banks, it added.

The SEBI had introduced T+5 rolling cycle in July 2001 and shortened the cycle further to T+3 basis in April last.

PTI

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