Settlement Cycle

  • What is Settlement Cycle?

    • In trading, there is a fixed time period for the settlement of trades as per terms of contract. This time period is termed as Settlement Cycle.
    • For equity trades: Currently all trades are settled on T+1 settlement cycle.
    • For derivatives/currency/commodities: Currently all trades are being mark to market at the closing price of contract and mark to market requirement are settled at T+1.
    • For arriving at the settlement day all intervening holidays, which include bank holidays, NSE holidays, Saturdays and Sundays are excluded.
  • What is the meaning of Rolling/Normal Settlement?

    A Settlement Cycle refers to a calendar according to which all purchase and sale transactions done on T Day are settled on a T+1 basis. T = Trading Day and +1 means 1 consecutive working days after T (excluding all holidays). It simply means that if the customer buys share on 30th Jan 2023 = T, Then the transaction will be settled on 31st Jan’2023 = T+1. At NSE and BSE, trades in rolling settlement are settled on a T+1 basis i.e. on the next working day.
  • What is the meaning of Trade-to-Trade Settlement?

    • Trade to Trade settlement is a segment where shares can be traded only for delivery. It means Trade to Trade shares cannot be traded on intraday basis. Each share purchased /sold which is a part of this segment need to be taken delivery by paying full amount.
    • No intraday netting off/square off facility is permitted.
  • What is the process of Auction at Exchange level?

    • In case an investor fails to deliver the shares sold in the Rolling Settlement, an auction is conducted of the quantity short delivered/ not delivered on T+1, to meet the obligation of delivery of shares to the buyer. In this auction session, offers are invited from fresh sellers for quantities short delivered.
    • The Member through whom one has sold the shares is not allowed to offer shares in the scrip for which he has failed to make delivery.
    • If the seller fails to deliver the shares, penalty will be charged by the Exchange.
  • Can I sell the shares in NSE which are bought in BSE?

    Yes, you can sell the shares in NSE which you have bought in BSE.
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