Back-to-back holidays in NSE's settlement calendar: What it means for investors?

Settlement holiay

Settlements of trades in the equity market will be delayed over the next couple of days as September 5 (Friday) and September 8 (Monday) have been declared holiday in Maharashtra, after RBI shifted its public holiday for Eid-e-Milad from Friday to Monday.

In a circular issued on September 4, the NSE announced changes to the settlement schedule, which had earlier declared September 5 (Friday) as a settlement holiday on account of Eid-e-Milad. Now, September 8 (Monday) will also be a settlement holiday.

What This Means for Shareholders?

While stock exchanges BSE and NSE will remain open on September 8, market depositories like NSDL (National Securities Depository Limited) and CDSL (Central Depository Services Limited) will be closed, hence, the settlement of trades will be delayed to September 9.

This means that shares bought from September 4 (Thursday) to September 8 (Monday) will not reflect in the demat accounts till the end of the session on September 9 (Tuesday). No fund payouts will be processed during the settlement holidays.

The auction markets and the currency derivatives market will also remain closed on the settlement holidays.

Market participants see settlement holidays as a technical pause where trading continues but pay-ins and pay-outs of funds and securities are deferred. Some of the market participants said the impact can be significant as any delay in settlement can create a temporary liquidity squeeze, limiting leverage and intraday activity.

Derivatives can see volatility as positions are adjusted in advance to factor in the delay, and arbitrageurs may scale back, widening the cash-to-futures spread in securities, said Naren Agarwal, CEO at Wealth1. Institutional money too may hold back on large trades until settlements resume, but this is unlikely to impact markets in the longer term, he added.

The Reserve Bank of India (RBI) has declared September 8 (Monday) as a public holiday, instead of the earlier declared September 5 (Friday). Accordingly, there will be no transactions and settlements in government securities, foreign exchange, money markets and rupee interest rate derivatives on the newly declared holiday.

Informing about the change, RBI in a statement on September 4 announced that government securities market, foreign exchange market, money market and rupee interest rate derivatives market will remain open on September 5 (Friday).

Also Read: Our LIVE blog on stock market updates

This comes as Maharashtra government revised the public holiday date for Eid-e-Milad in Mumbai city and suburban districts from September 5 to September 8. As per the government notification, government offices in Mumbai city and suburbs will remain open on September 5, with the public holiday now being applicable instead of September 8. However, in all other districts of Maharashtra, the public holiday for Eid-e-Milad will continue to be observed on September 5, 2025, as previously declared.