Securities and Exchange Board of India will introduce T+2 rolling settlement cycle from April 1 to reduce risks in the capital market and protect investors' interest.

The market regulator will issue separate instructions to intermediaries and exchanges shortly and take steps to ensure smooth transition from T+3 cycle to T+2 settlement mechanism by widening use of electronic fund transfer and straight through processing, a Sebi release said in Mumbai Friday.

Under the T+2 cycle, the conformation for institutional trades by custodians should be done by 11 am on T+1 basis, the release said.

A provision will be made for "exceptional window" to deal with late confirmation of institutional trades, it said, adding the time limit and additional charges for the window will be decided by the exchanges.

The exchanges, clearing houses and corporations would have to execute the securities pay-out and funds on T+2 basis for depositories and clearing banks, it added.

Sebi had introduced T+5 rolling cycle from July 2001 and shortened cycle further to T+3 basis in April 2002.