A Guide to Trade Settlement In India
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What is Trade Settlement FAQs
What is the role of trade settlement?
Trade settlement is responsible for the entire post-trade process, including connection of trades with counterparties, matching/confirmation/affirmation of trades, as well as resolving exceptions.
What is trade settlement in India?
When the buyer receives the securities and the seller receives payment, this process is called trade settlement. Officially, the transaction takes place on transaction day, but the final ownership transfer happens on settlement day. Furthermore, the transaction date never changes.
Why do trades take 2 days to settle?
The reason traders take 2 days to settle is to allow the seller to collect necessary documents and the purchaser to clear the funds required for settlement.
What is the trade settlement date in India?
For all traded instruments on Indian exchanges, the settlement cycle is T+2 days, with T representing the trading day.
Can I sell shares before settlement?
No. If you bought the shares with unsettled funds, you cannot sell them until the funds are settled.