MUMBAI: Investors and traders on the Indian bourses will soon be able to recover their sale proceeds or credit of shares within one day of the trade being made on exchange as the Securities and Exchange Board of India (SEBI) has proposed a ‘Trade-plus-one’ day (T+1) settlement cycle from January 1, 2022.

In a circular titled, 'Introduction of T+1 rolling settlement on an optional basis to all exchanges, clearing houses and depositories, SEBI has said that, considering the requests from various stakeholders to shorten the settlement it has been decided to allow exchanges to offers either T+1 or the existing T+2 settlement cycle.

The current T+2 settlement cycle was introduced by SEBI in February 2003, which shortened the rolling T+3 settlement by one day. 

When the system comes into play, a stock exchange can choose to offer T+1 settlement cycle on any of the scrips to all stakeholders, after giving advance notice of at least one month regarding the change in the settlement cycle.

The SEBI circular further said that a stock exchange will have to mandatorily continue with the same for a minimum period of six months after opting for T+1 settlement cycle for a scrip. In case the stock exchange wishes to switch back to T+2 settlement cycle, it will have to give one-month notice to the market.

SEBI had set up a panel of experts in August to look into the concerns that could hinder the process of shifting the country’s trade settlement to T+1 (Trade plus 1 day) from the current T+2.