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FPI bodies ask SEBI to postpone shift to T+1 settlement

SEBI, on September 7, introduced T+1 (Trade plus 1 day) rolling settlement cycle for equity transactions on an optional basis.

September 30, 2021 / 12:29 PM IST
The new rule will come into effect on January 1, 2022.

The new rule will come into effect on January 1, 2022.

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.

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Also read: Here's how the T+1 system of settlement is better both for buyers & sellers

"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.

BSE CEO and MD Ashishkumar Chauhan told BloombergQuint that the T+1 settlement cycle is bound to be implemented from 2022.
Moneycontrol News
first published: Sep 30, 2021 12:29 pm

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