Foreign funds have asked market regulator Securities and Exchange Board of India (SEBI) to defer implementation of the T+1 settlement system.
Three offshore fund lobby groups – the Asian Securities Industry and Financial Markets Association (ASIFMA), Traders Forum of Hong Kong and the UK-based Investment Association – have sent a joint letter to SEBI Chairman Ajay Tyagi, The Economic Times has reported.
"We strongly urge Sebi to delay the coming into effect of the circular that is scheduled for January 1, 2022, so that all stakeholders have sufficient time to identify, come up with, test and implement the operational processes and procedures required to safely implement a T+1 settlement model in India," said the letter addressed to Tyagi, as quoted by the publication.
The organisations allege that they were not consulted on the new rules.
SEBI had not yet responded when contacted by The Economic Times.
"Neither FPIs nor their custodians in India were consulted before the SEBI circular was issued on September 7," Eugenie Shen, managing director, head of the asset management group at ASIFMA, told the publication.
The market regulator, on September 7, introduced T+1 (Trade plus 1 day) rolling settlement cycle for equity transactions on an optional basis. The new rule will come into effect on January 1, 2022.