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What the new T+1 settlement process entails for investors and markets?

The T+1 settlement would benefit the retail investors at large and immense liquidity in the market is expected as the T+1 settlement cycle would kick in.

February 24, 2022 / 07:23 AM IST

The stock exchanges in India will be implementing a new T+1 settlement process in phases beginning tomorrow.

What is a settlement?

In the stock market, for a trade to happen, there is always a buyer and a seller. So, when a person buys a certain number of shares, there is another trader who is willing to sell those shares. The settlement cycle is said to be completed only when the buyer receives the shares and the seller receives the money.

In India, the settlement process is based on rolling settlement principle of T+2 as of now.