What is Rolling Settlement Cycle in Stock Market?

Understand What is Rolling Settlement Cycle in Stock Market.

Here we will understand What is Rolling Settlement Cycle in Stock Market in India. What is T+1, T+2, T+3, T+4, T+5, T+6, T+7, T+8, T+9 Rolling Settlements.

What is Rolling Settlement Cycle in Stock Market?

Rolling settlement is a system to settle share transactions in predefined number or days. It is a mechanism of settling trades done on a stock exchange on the Day of Trade (T) plus “X” trading days. “X” trading days could be any number of days like 1,2,3,4 or 5 days.

If we say the rolling settlement for a transaction is T+3 then it means that the transaction will be settled in TODAY + Next 3 Days.

So, in T+3 environment, a trade done on T day is settled on the 3rd working day excluding the T day excluding working holidays.

In Rolling Settlement Cycle, share trading done on each single day are settled separately from the trades done on earlier or subsequent trading days.

In Stock Market in India, after April 1, 2002, all trades done on stock exchange are settled on T+3 basis. There could be some deviations because of Bank Closing or National Holidays.

At NSE and BSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working day. Saturdays and Sundays are excluded because the stock exchanges remain closed on weekends.

• Also Read: How Stock Market Works?

How is Rolling Settlement Cycle Calculated?

Activity	Rolling Settlement Trading	T Day	Timing
Clearing	Download of Obligation of Members / Custodians by NSCCL	T+1 Days	By 1:30 p.m
	Custodial Confirmation
	Delivery Generation – Members receive obligations to be fulfilled
Settlement	Members Give Instructions for Paying-In of Securities, i.e, Move Obscurities in the Settlement A/C of NSCCL	T+2 Days	By 10:30 a.m
	Securities and Funds Pay in		At 11:00 a.m
	Securities and Funds Pay out		At 1:30 p.m
	Valuation of Shortages Based on T+1 Closing Prices		By 2:30 p.m
Post Settlement	Auction	T+3 Days
	Bad Delivery Reporting	T+4 Days
	Auction Settlement	T+5 Days
	Rectified Bad Delivery Pay-in and Pay-out	T+6 Days
	Re-Bad Delivery Reporting and Pickup	T+8 Days
	Close out of Re-Bad Delivery and Funds Pay-in and Pay-out	T+9 Days

• Also Read: Stock Market Terminology for Beginners
• Also Read: What is Intraday Share Trading?

FAQs: Rolling Settlement in Stock Market

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