T+5 Settlement From July 9

The National Stock Exchange (NSE) will start implementing its rolling settlement cycle from July 9, 1997. The rolling settlement cycle in all the dematerialised scrips will start on a T+5 basis.

This means that any purchases or sales in any of the dematerialised scrips from July will be settled five working days later. Counting the two days the exchange is shut every week - Saturday and Sunday - each trade in a dematerialised scrip will be settled on the same day the following week. Unlike the current weekly settlement system where only the net position of the broker is settled by the clearing corporation at the end of the week, the rolling settlement system will see each trade being settled separately after five working days. There are currently thirty five dematerialised stocks that are listed on the NSE. Officials at the NSE say that the rolling settlement system will become increasingly important as more and more scrips are dematerialised.

 

Currently, over 70 companies have decided to dematerialise their scrips but the process of their joining the rolling settlement list will take some time.

This is because the infrastructure of the registrars and transfer agents have to be upgraded, say NSE officials.

Registrars need to be connected on-line to the exchange, the clearing corporation and the depository in the initial stages to confirm the receipt and dematerialisation of shares from investors.

This entails an investment of Rs 25-Rs 30 lakh.