From today, Indian equity markets are moving to T+1 settlement cycle for all stocks, shortening the settlement cycle by one day and speeding up the availability of funds. To give this benefit to mutual fund investors, all asset management companies (AMCs) will move to T+2 redemption payment cycle for equity schemes, and it will be implemented uniformly from February 1.
This includes all transactions received before the cut off timing on February 1 and processed at closing NAV of February 1 after allowing a few days for the settlement cycle/process to stabilize.
A Balasubramanian, MD & CEO Aditya Birla Mutual Fund and Chairman, AMFI said, “The T+1 settlement cycle is a global first for the Indian equity markets. As an industry, we want to benefit our mutual fund investors and Hence we are actively adopting T+2 redemption payment cycle for equity funds.”
“AMFI and its member AMCs always keep the interest of the investors at the forefront. From the day SEBI announced phased movement of equity markets to T+1 settlement cycle, the industry is gearing up to shorten the redemption payment cycle and we have to announce a shift to T+2 payment cycle with effect from February 1, 2023 Happy to do it. AMFI Chief Executive Officer NS Venkatesh said.
After inducting the last set of 256 scrips on Friday this week, the Indian stock market is set to become the first in the world to have a T+1 settlement cycle for investors. Hence, the shares sold or bought from Friday will reflect in the demat account of the investors after a period of one day, leading to quicker settlement and faster liquidity for the stock market investors.
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