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BSE, NSE move to 2-day cycle from Apr 1
March 31, 2003 12:49 IST
India's two largest bourses, the National Stock Exchange and the Bombay Stock Exchange, said on Monday that they are on course to shift to a T+2 rolling settlement cycle from Tuesday, cutting the current cycle by a day.
"Notifications (about the change) have been issued to members and we are on course to shift to the new system from April 1," said a BSE official.
NSE officials also said their bourse, the country's biggest, will move to the shorter cycle from Tuesday.
Under the new settlement cycle, pay-in of securities and funds will take place at 1100 IST two days after deals are struck, a circular on the NSE Web site (nseindia.com) said.
Pay-out of securities and funds will be at 1330 IST on the same day, it said.
Under the new system, all transactions will be closed two trading days after the deal is struck, against three currently.
Analysts say the shorter trade cycle will reduce speculation because of the need to pay for trades more quickly. The shorter cycle would also reduce risks as any financial problems would come to light faster.
The move follows a roadmap laid down by capital market regulator Securities and Exchange Board of India in January.
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