In September, the Securities and Exchange Board of India authorised plans for India’s two largest stock exchanges, the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), to shorten their settlement cycle for listed equities to T+1 on a phased approach beginning on 25 February 2022.
The initiative would see India become the first market to accelerate its equities settlement cycle from T+2 to T+1.
In support of the anticipated accelerated market timelines, The Depository Trust & Clearing Corporation (DTCC), who have been integral to moving the US equities markets to T+1, is working with India’s T+1 Industry Working Group (IWG) to promote broader adoption of its institutional trade processing's settlements management notifications functionality.
DTCC’s platform accelerates the process of communicating the matched economic details of a trade to local custodians throughout the trading day without having to wait till the close of trading.
In December 2021, DTCC released a report predicting that US securities are likely to move to next-day settlement during the first half of 2024.
In the report, DTCC, the Investment Company Institute and the Securities Industry and Financial Markets Association predicted that a transition from T+2 to T+1 settlement for the US in H1 2024 will give impacted firms sufficient time to assess the changes required, to conduct testing and for financial supervisors to implement the necessary regulatory amendments.
This will deliver T+1 settlement for US securities slightly less than a quarter of a century after moves to deliver this reduced settlement cycle, led by the Securities Industry Association, were “postponed” in July 2002.
