List of Securities for T+1 Settlement

Introduction

The T+1 settlement cycle is a system where stock market transactions are completed just one business day after the trade takes place. In the past, the Indian stock market followed a T+2 system, meaning it took two working days for shares to reach your Demat account or for sale proceeds to be fully available for withdrawal. Today, India is a global leader in market efficiency, having transitioned all equity shares, including those on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), to the T+1 cycle. This means if you buy a stock on Monday, it will be credited to your account by Tuesday.

What is a T+1 Settlement?

In the stock market, T stands for the Trading Day the day you actually click the buy or sell button. The +1 signifies one additional business day required to finalize the paperwork, move the shares, and transfer the money.

Before this change, India used a T+2 system. The move to T+1 was spearheaded by the Securities and Exchange Board of India (SEBI) to make the markets safer and more liquid. By shortening the time it takes to finish a trade, the counterparty risk (the risk that the other person in the trade might fail to deliver) is reduced by half.

The Settlement Timeline

Day	Action
T (Trade Day)	You execute the buy or sell order on the exchange.
T+1 (Working Day 1)	The Clearing Corporation transfers shares to the buyer and funds to the seller.

Note: Weekends and public holidays are not counted as working days.

List of Securities Under T+1 Settlement

Initially, SEBI introduced T+1 in a phased manner starting with the smallest companies. However, as of early 2023, the transition is complete. Now, almost all primary securities traded on the NSE and BSE operate under the T+1 framework.

1. Equity Shares (All Stocks)

Every single company listed on the main board of the NSE and BSE from large-cap giants like Reliance and HDFC Bank to small-cap firms is now settled on a T+1 basis. This includes:

• Nifty 50 Stocks
• Next 50 Stocks
• Mid-cap and Small-cap Stocks
• Trade-for-Trade (T2T) Stocks

2. Exchange Traded Funds (ETFs)

Whether you are investing in a Nifty 50 ETF, a Gold ETF, or an International Market ETF, these units are credited to your Demat account on a T+1 basis.

3. Real Estate Investment Trusts (REITs)

REITs allow you to invest in large-scale, income-producing real estate. These securities also follow the faster T+1 settlement cycle.

4. Infrastructure Investment Trusts (InvITs)

Similar to REITs but focused on infrastructure projects like roads and power plants, InvITs are settled one business day after the trade.

5. Sovereign Gold Bonds (SGBs)

When you trade SGBs on the secondary market (the stock exchange), the settlement follows the T+1 rule.

6. Debt Securities and Corporate Bonds

Listed bonds and debentures traded in the cash segment of the exchanges have also moved to this shortened cycle to ensure uniformity across the market.

Securities with Different Settlement Cycles

While the majority of the Cash Market is now T+1, it is important to remember that some segments have always operated differently or are moving toward even faster options.

• Futures & Options (F&O): The F&O segment in India has historically operated on a T+1 basis for mark-to-market (MTM) settlements.
• T+0 Beta Version: As of 2024, SEBI has started a pilot project for T+0 (Same Day) settlement for a limited list of 25 to 50 highly liquid stocks. This is optional and runs alongside the standard T+1 cycle.
• Mutual Funds: While some liquid funds settle on T+1, many equity mutual funds still take T+2 days for the proceeds to reflect in your bank account after redemption.

Importance of the T+1 Cycle for Investors

The shift to T+1 isn't just a technical change; it has real benefits for the person behind the screen.

1. Faster Access to Liquidity

The biggest advantage is that your money is unlocked faster. If you sell shares on Wednesday, the funds are available for you to withdraw or use for other investments by Thursday evening. Under the old system, you had to wait until Friday.

2. Margin Efficiency

When you sell a stock, 80% of the sale value is usually available for new trades on the same day. However, the final 20% and the ability to withdraw the cash previously took two days. With T+1, that final portion is cleared much quicker.

3. Lower Risk

Since the settlement happens faster, there is less time for a systemic shock (like a global financial crisis) to occur between the time you trade and the time the trade is finalized.

4. Global Ranking

By moving to T+1, the Indian stock market became one of the fastest in the world, even ahead of many developed markets in the US and Europe. This attracts more foreign institutional investors (FIIs) who appreciate high-efficiency markets.

Understanding Settlement Holidays

A Settlement Holiday is different from a Trading Holiday. This is a common point of confusion for new investors.

• Trading Holiday: The stock exchange is closed. No buying or selling happens.
• Settlement Holiday: The exchange is open for trading, but the banks or the depositories (NSDL/CDSL) are closed.

What happens on a Settlement Holiday?

If you buy shares on a day that is followed by a settlement holiday, your shares will take an extra day to arrive.

Example:

• Monday: You buy shares (T-Day).
• Tuesday: A regional bank holiday (Settlement Holiday).
• Wednesday: Shares are credited to your account (T+1).

In this case, even though it looks like T+2, it is still technically a T+1 cycle because the holiday is skipped.

Summary of T+1 vs T+2

Feature	Old System (T+2)	New System (T+1)
Share Credit	2nd Business Day	1st Business Day
Cash Withdrawal	2nd Business Day	1st Business Day
Market Risk	Higher (48-hour window)	Lower (24-hour window)
Operational Speed	Moderate	Very High

Things to Keep in Mind

While T+1 is great, investors should be aware of a few operational details:

1. BTST Trades: Buy Today, Sell Tomorrow is still possible. However, during the transition phase of a stock from one cycle to another, there might be temporary restrictions on selling shares before they are credited.
2. Early Pay-in: To ensure your trades settle on time, brokers now have stricter deadlines for moving shares out of your Demat account when you sell. Most of this is handled automatically if you have been given a Power of Attorney (POA) or use the electronic DIS (EDIS) facility.
3. Auction Risk: If you sell a stock and it is not in your Demat account (Short Delivery), the auction process now happens faster. You should always ensure you have the shares before selling to avoid heavy penalties.

Conclusion

The implementation of the T+1 settlement cycle for the entire list of securities on the NSE and BSE is a landmark achievement for the Indian financial sector. It empowers retail investors with faster access to their capital and reduces the overall risk in the system. Whether you are a long-term investor or a frequent trader, the T+1 system makes your experience smoother and more efficient. As the market continues to evolve toward even faster options like T+0 and instant settlement, the foundation remains the same: a transparent, high-speed, and secure environment for growing your wealth. By understanding these timelines, you can plan your trades and cash flows with much greater precision.