In a big news, the National Stock Exchange of India said the T+0 rolling settlement cycle in its capital market segment has been put on hold. The rolling settlement system promises faster settlement of trades has been put on hold until further notice, NSE confirmed through a statement. Investors can hope to get a date once communicated through an official circular.
The system of a T+0 settlement cycle should provide the settlement option to be settled on the same day, which is an important advancement in the current T+1 system where the trades are settled the next day. Effective clearing by the corporations toward risk management as well as reduced capital lock-ins can ensure better functionalities in terms of liquidity.
Over the years, the settlement cycles of Indian stock exchanges have been constantly improved. Where it was T+5 settlement cycle, i.e., five working days after the trade, in the early years, it became T+3 in the year 2002, then T+2 settlement in calendar year 2003. In the recent times, in 2021, it has been initiated in phases and fully implemented by January 2023 with the introduction of the T+1 settlement cycle.
Once the cycle is implemented, it will benefit those investors who fulfill definite timelines and risk management objectives for the NSE and clearing corporations. Under the T+0 system, the cut-off time for pay-ins is scheduled to be 3:30 PM according to the clearing corporation.
Moreover, to ensure system resiliency and uninterrupted trading, NSE has planned live trading from its Disaster Recovery (DR) site on 30 Sept and 1 Oct, 2024. The exchange will conduct Mock Trading sessions for the capital market and F&O segments on 28 Sept, 2024, before it.
According to an official statement by NSE, “Members are hereby informed that the Exchange Contingency Tests will be held from 12:00 PM to 01:00 PM during the mock trading session on September 28, 2024. Members would accordingly make necessary adjustments.”.
Tests and operation of the DR site form a part of the continuous process at NSE for the maintenance of continuity in operations and preparedness for any eventuality. Trading on the capital and F&O markets will remain uninterrupted due to this disaster recovery site and investor confidence will remain intact.
