Nse 5-Day Trading Cycle From July 2

The National Stock Exchange (NSE) will reschedule its 5-day trading cycle from July 2 so as to fulfill the Securities and Exchange Board of India (Sebi) directive of having uniform settlement period across the country. The new settlement period will be Monday to Friday against the current Wednesday to Tuesday cycle.

To comply with Sebi directive on settlement cycle, the NSE is reducing its settlement week to just three days from June 27, which would align its trading cycle with the Bombay Stock Exchange (BSE's) weekly settlement cycle from July 2.

The Kolkata bourse, which has a Friday to Thursday cycle, is also expected to fall in line and introduce settlement week from Monday to Friday, along with the compulsory rolling settlement beginning July 2.

Currently, the BSE and NSE follow two different settlement weeks. While the BSE follows a Monday to Friday cycle, for the NSE, it is from Wednesday to Tuesday.

The NSE, in a circular to its members, has stated that Sebi has listed 414 securities, which are included in the automated lending and borrowing mechanism/ borrowing and lending securities scheme/ modified carry forward system (ALBM/BLESS/MCFS) and BSE 200 list, for trading only in the compulsory rolling settlement. But in the NSE, this covered only 301 securities as the rest of them were either not listed or not traded there.

In the compulsory rolling settlement, traders/ buyers cannot carry forward their position to the next day. They will have to either square off their position within that day or take delivery of scrips/ receive payment on the due date.

The remaining listed and permitted securities would be available in both the rolling and account period settlement (weekly settlement), the NSE circular said. The NSE will also offer limited physical market settlement (odd lot trading as known on BSE) for shares meant to be traded only in demat form but which were held in physical form by shareholders in their name. This will form the account period settlement cycle.

With the introduction of these changes, the NSE has notified the withdrawal of certain trading segments. The ALBM will not be available for creating fresh positions from July 2, and will be totally discontinued from September 3. ALBM sessions would be on a T+1 day basis from July 2 (as per rolling settlement). The three-day (3D) segment will be discontinued.

The trade for trade segments in physical (TT) and electronic (BT) are also being suspended. However, trade will be permitted in TT segment for securities specified by the Sebi on a trade-for-trade basis and in specific security as approved by authorities from time to time, the notification said.