T+2 Settlement System Will Be Implemented from Magh 11: This is How It Works
Tue, Jan 19, 2021 4:08 PM on Stock Market, Latest,
CDS & Clearing Limited has unveiled an official notice informing about the implementation of T+2 settlement system from Magh 11.
In simple words, new rules have been made for all the concerned institutions so that settlement of shares happen within two working days.
The new arrangement requires all the concerned parties to play by the rules. For instance, investors must perform e-DIS related activities by the next day after they sell their shares. This procedure lets the shares transfer from the client's portfolio to the broker's pool. The shares will then be transferred to the buyer. Similarly, investors must make payment of the shares they buy within the next day of buying.
On the other side, the settlement member must complete WACC related activities by 11 am within the T+2 days timeframe. If share transfer is not done by investors, they are required to file Shortage Mark by 12 PM of the T+2 timeframe. Commission and fees must be deposited by 12 pm and the shares must be transferred to client's Demat accounts immediately after settlement.
Meanwhile, Depository Participants are required to update the e-DIS details received from Meroshare by 11 am of each working day. A file must then be generates and uploaded as CDAS. In short, the DP should work to approve the transaction and process the e-DIS within two business days.
It is to be noted that investors are meant to receive payment immediately after settlement. The respective broker office of the investor also receives the shares on its pool account on the same day that settlement is completed. Thus, any proceeding after that depends on the efficiency and customer service of broker offices.