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Securities and Exchange Board of India

DEPUTY GENERAL MANAGER
DEPOSITORIES AND CUSTODIAL DIVISION

DCC/FITTC/CIR-19/2003
March 4, 2003

To

National Securities Depository Limited

Central Depository Services (India) Limited

Dear Sir,

Depositories and Custodial Division — Circular No. 19
Sub: Calendar for the implementation of T+2 rolling settlement w. e. f. April 1, 2003

 It has been decided to shorten the settlement cycle from the existing T+3 rolling settlement to T+2 rolling settlement w. e. f. April 1, 2003. After detailed deliberations with various market participants, a time schedule for the implementation of T+2 rolling settlement beginning from April 1, 2003 was prescribed by SEBI on January 3, 2003. A summary of the time schedule is as follows:

S. No. Day Time Description of activity
1 T Trade Day
2 T+1 By 11:00 a.m. Confirmation of all trades (including custodial trades). Facility of an exceptional window for late confirmations would be made available by the exchanges.
By 1:30 p.m. Processing and downloading of obligation files to brokers / custodians
3 T+2 By 11:00 a.m. Pay-in of securities and funds
By 1:30 p.m. Pay-out of securities and funds

The Depositories shall adhere to the following activities as per the prescribed time to implement the above time schedule for T+2 rolling settlement. The Depositories would in turn advise the Depository Participants (DPs) to adhere to the designated activities within the prescribed time limits and therefore, the earlier circular no. D&CC/FITTC/CIR – 07/2002 dated April 8, 2002 stands modified w. e. f. April 1, 2003 as under:

1.DPs shall accept instructions for pay-in of securities from clients in the physical form atleast upto 4 p.m. and in electronic form atleast upto 6 p.m. on T+1.

2.DPs shall complete execution of pay-in instructions latest by 10:30 a. m. on T+2.

2.Depositories would download the processed pay-in files to the exchange / Clearing House / Clearing Corporation latest by 11:00 a.m. on T+2.

3.Pay-out of securities by the exchange / Clearing House / Clearing Corporation to the Depositories by 1:30 p.m. on T+2.

4. Pay-out of securities to be completed by the Depositories by 2:00 p.m. on T+2.

5. All instructions received by the Depository Participants must have an execution date. The execution date can be current date or future date. Instructions will be valid till the pay-in deadline or till ‘end of day’ (EOD) of the execution date, whichever is earlier. DPs would bring this to the notice of the client while accepting instructions. In case the account does not have sufficient balance before pay-in deadline or till EOD, such instructions will fail.

Further in order to ensure the smooth implementation of T+2 rolling settlement by April 1, 2003 and to facilitate the implementation of T+1 rolling settlement from April 1, 2004, the Depositories shall initiate the following steps:

1.Implementation of real time online connectivity between the Depositories.

2.Depositories would be required to design a system so that the exchanges / Clearing House / Clearing Corporation would be able to implement a system of online transmission of client-wise pay-in obligations to the depository so that the depository in turn could download the security pay-in instructions to DPs in respect of the investor maintaining account with them.

3.Depositories are also required to put up systems to facilitate settlement of transactions by the Clearing House / Clearing Corporation arising out of securities lending and borrowing to meet shortages of pay-in obligations.

G.S. Reddy

 

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