Stock exchanges to start T+1 settlement cycle from Feb 25, 2022 in phases

Some of the global custodians, through which a large number of FPIs transact, welcomed the exchanges' move

India’s stock exchanges have decided to jointly introduce the T+1 settlement cycle in phases from February 25, beginning with the bottom 100 stocks by market capitalisation.

From March 2022, on the last Friday (or the immediate next trading day) of every month, the next 500 stocks from the bottom will be subject to T+1 settlement. The phase-wise implementation is expected to give all market participants, including foreign portfolio investors (FPIs), ample time to shift to the shorter cycle.

The settlement cycle represents the time period within which the stock exchanges have to settle security transactions. T+1 means settlements will have to be