Us follows India: stock mrket

 

Us follows India: decides to switch to 

T+1 trade settlement cycle 

Shivam waghela 

MumbaI; The US has announced a transition to a shorter T+1 (trade plus one day) settlement cycle. The US Securities and Exchange Commission (SEC) decided to shorten its settlement cycle to one day by May 28, 2024.
Growing pressure on global regulators to shorten settlement cycle, say experts
India is among the firsts in the world to go for such a faster trading settlement cycle, putting itself ahead of the US. The T+1 settlement was proposed recently with implementation timelines of 24 months by the US Securities Exchange Commission (SEC).
 The Securities and Exchange Commission (SEC) last year voted to propose rule changes to reduce risks in the clearance and settlement of securities, including by shortening the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade date (T+2) to one business day after the trade date (T+1). The proposed changes are designed to reduce the credit, market, and liquidity risks in securities transactions faced by market participants and U.S. investors, the regulatory body said in a paper.

“Shortening the settlement cycle should reduce the amount of margin that counterparties would need to post with clearinghouses," SEC Chair Gary Gensler said in a paper last year. “As the old saying goes, time is money."