You are here: Home » Markets » News
Business Standard

Market regulator's T+1 settlement proposal faces opposition from FPIs

Foreign investor body writes to the market regulator highlighting operational difficulties

Sebi | foreign portfolio investments | Domestic markets

Samie Modak  |  Mumbai 

Industry players said different time zones present the key challenge for FPIs as clients are spread across Europe, America, Hong Kong and Singapore.

A one-day trade settlement cycle (called T+1 in industry parlance) could remain a pipe dream for the . The Securities and Exchange Board of India’s (Sebi’) proposal has met with stiff opposition from foreign portfolio investors (FPIs) — considered the price-setters for the Indian market.

Industry body Asia Securities Industry and Financial Association (Asifma) has shot a letter to the regulator and the finance ministry highlighting operational difficulties for FPIs if the settlement cycle is halved.

At present, the domestic follow a T+2 settlement — the transfer of cash and securities between the buyer and seller gets completed two days after trading day.

In the letter, Asifma has highlighted operational challenges such as time zone difference, cumbersome information flow, and related issues, sources said. The Hong Kong-based body has also warned that shortening the cycle could discourage large investors from taking positions in the domestic market and could lead to increased instances of settlement failures.

An email sent to Asifma remained unanswered. Industry players said the key challenge for FPIs remains time zone difference as clients are spread across Europe, America, Hong Kong, and Singapore.

ALSO READ: Chris Wood hikes allocation to Indian equities; raises stake in HDFC



What you get on Business Standard Premium?

  • icon Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
  • icon Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
  • icon Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
  • icon Pick your 5 favourite companies, get a daily email with all news updates on them.
  • icon 26 years of website archives.
  • icon Preferential invites to Business Standard events.


Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, October 16 2020. 18:57 IST