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What is Rolling Settlement (T+2) When trading In Shares?


When you buy and sell shares there is always a need to pay money and take delivery when you buy the shares.


What is Rolling Settlement (T+2) When trading In Shares?
When you sell the shares on the other hand you have to give delivery of shares and receive payment for the shares sold.

Settlement of shares in India

In India settlement of shares is done on a T+2 basis. What this means is that your settlement would be done after 2 days of the trade being executed. Let's give an example. If you sell the shares of Oriental Bank of Commerce on Tuesday, you would receive payment of the same after 2 days, that is on Friday, because the trade is settled on Thursday.

This is what the T+2 settlement in India means when trading in shares. In rolling settlement of shares what takes place is nothing but the settlement everyday on a rolling basis, wherein trades are settled everyday.

Very important to make note of settlement days

It's very important to take note of the settlement days because you need to give delivery of shares. Those who trade through the internet need not bother to give physical delivery on the due date as the delivery is automatically debited from the account. However, others have to make sure that they give their delivery instruction note in case they sold shares, which will then be debited from their account.

Keep in mind the rolling settlement date, so that you can receive payment the next day for the shares that are sold.

The T+2 settlement also applies for shares being traded in the cash segment as well as the Futures and Options segment of the market.

This settlement applies to both the Bombay Stock Exchange and the National Stock Exchange and has been in practice for many years now. It has worked very well and when you sell shares, the T+2 settlement makes buying and selling shares very liquid.



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