BloombergQ: India starts T+1 settlement transition

India’s stock exchanges, clearing corporations and depositories will start rolling out a shortened equity trading settlement cycle from February 25.

The complete transition to the next-day rolling settlement, or T+1 regime, will take place by January 27, 2023. The T+1 settlement cycle will see nearly 5,300 stocks transition to the curtailed cycle between February 2022 and January 2023, in 12 phases, according to the schedule. Most large-cap companies will shift in January 2023.

In the initial phase, the transition is unlikely to impact any institutional investors such as foreign portfolio investors, mutual funds, AIFs or any other domestic institutions since the stock under transition are illiquid and are at the bottom of the market cap rank. Institutional investors will have to make changes by July-August as stocks with higher market cap and liquidity will start entering into T+1.

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