SEBI's decision to reduce the settlement cycle from T+2 to T+1 will also bring down the settlement cycle of ETF transactions.
An official from BSE said the settlement time would be uniform for all listed instruments on exchange. "If we move to T+1, the settlement time will shorten for all trades, be it stocks or ETFs," he said.
On September 7, SEBI issued a circular asking stock exchanges, clearing corporations and depositories to reduce the turnaround time to settle trades in direct equity from T+2 to T+1 on a voluntary basis.
This essentially means that from January 1, 2022, stock exchange platforms will have an option to facilitate faster settlement cycle by opting for the T+1 regime.
Settlement cycle which is typically referred to as transaction date plus one day or two days (T+1 or T+2) in Indian markets represents the time in which ownership of a security is transferred.
