Hi traders and investors!
As you would already know, India is transitioning from T+2 settlement times to T+1.
On this same track, the last batch of all remaining securities will be migrating from T+2 settlement to T+1 settlement effective this Friday, 27 January 2023. Due to this change in the settlement cycle, all stocks bought on Wednesday (25 January 2023) will not be available for selling on Friday, 27 January 2023.
This is done to ensure that all remaining securities in transition are settled on the day as a result of the change in the settlement cycle. You can view the securities list for the same here
To make it simpler for you to understand, let’s consider the below example:
Say you bought 100 shares of ABC (one of the securities that are being transitioned) on Wednesday, 25 January 2023, with the settlement of the same being T+2 the shares will be credited to your Demat account on Monday, 30 January 2023. If you sell these shares on the following day i.e. Friday, 27 January 2023 (BTST), due to the settlement being migrated to T+1 settlement the shares will be required to be delivered on Monday, 30 January 2023.
Now at the exchange, securities PAY-IN for the shares sold on Friday, 27 January 2023 under T+1 settlement happens at 10:30 AM on Monday, 30 January 2023 while securities PAY-OUT for shares bought on Wednesday, 25 January 2023 happens around 01:00 PM on Monday, 30 January 2023. Thus the time difference between pay-out and pay-in will cause a shortage in delivery leading to an auction. Therefore, to safeguard our clients, we will not show the shares bought on Wednesday, 27 January 2023 in your holdings on Friday, 27 January 2023 thereby prohibiting them from selling.
Please note that post this batch of migration, all the securities will follow T+1 settlement cycle.
Reference: NSE circular | BSE cicular