RISING STOCK
January 27, 2023, was a significant day in the history of India's capital markets-they fully transitioned to T+1 settlements, which meant if you sold shares you would get the money in your account the next day.
They went one better on March 25, 2024, as the stock exchanges debuted T+0 settlement for 25 scrips, which meant sellers would get their money on the same day. The plan is to move to instantaneous settlements next year.
The journey towards shorter settlement had begun when the Securities and Exchange Board of India allowed exchanges to move from T+2 to T+1 settlement cycle in January 2022. It was done in phases and took a year for complete switching. There were hiccups. The custodians of foreign institutional investors resisted it citing some difficulties. But, SEBI chairperson Madhabi Puri Buch ensured that all of them were ironed out.
Quicker settlements offer many benefits, notably the reduction of counterparty risk (the probability that the other party may not fulfil the contractual obligations) and the bolstering of market efficiency, said Rakeshh Mehta, chairman of Mehta Equities. "Furthermore, it is anticipated to substantially lower operational expenses for market participants and reduce the funding costs that brokers face," he said.
There are, however, many challenges and concerns. A shorter settlement cycle would necessitate an overhaul of the market infrastructure, systems and processes. Also, it may contribute to an increase in market volatility. SEBI says it will continue consultations with stakeholders and the board will review the progress periodically.
Denne historien er fra April 14, 2024-utgaven av THE WEEK India.
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Denne historien er fra April 14, 2024-utgaven av THE WEEK India.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9500+ magasiner og aviser.
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Ethics, out of the window
Like evil spirits, corruption haunts human civilisation.
Scripting history
S. Prasanna Sree, Andhra Pradesh's first tribal woman vice chancellor, has created scripts for 19 tribal languages
IN THE AFTERGLOW
Banu Mushtaq has embarked on an ambitious post-Booker journey—illuminating the world with Kannada stories
Kharge, Clausewitz and strategic culture
How times have changed! Three decades ago, George Tanham sneered at Indians for - lacking a strategic culture. Today we have Mallikarjun Kharge quoting Clausewitz.
When Jinnah wanted a united India
Through vivid sketches and meticulous detail, a new biography offers a startling new perspective on India's partition—showing how Mountbatten, armed with charm and steely determination, pushed a resigned Congress and a reluctant Muslim League into accepting his plan
ABC of D
THE DIFFERENT TYPES OF DRONES AND WHAT INDIA SHOULD FOCUS ON
SPOTTED! THE GREY GHOST
This World Environment Day, THE WEEK takes you to the cold mountains of Ladakh-home to the highest number of vulnerable snow leopards in India-bringing back tales of an exciting chase, a first-hand account of man-animal conflict and the comforting knowledge of how people in remote Himalayan villages are learning to coexist with the enigmatic but elusive cat
The constant gardener
Banu and Mushtaq's story of love, resistance and literary triumph
Mark Carney's Trump card
Sharks famously circle their prey, waiting for the right moment to move in for the kill. Landsharks do the same, circling the piece of real estate they covet, until it is ripe to fall into their itching hands. Meantime, they manoeuvre and manipulate, threaten and tempt.
MAJOR CHALLENGE IS AVAILABILITY OF PROPULSION SYSTEMS
Q/ With high-tech weapons changing modern warfare, which are the focus areas of research at DRDO?
