Financial regulator Sebi opens for optional day-after-trade settlement already from 1 January 2022. Foreign funds brokers are critical, pointing out procedural time lags, Times of India reports.
Foreign investors and brokers oppose the move by Sebi, the Securities and Exchange Board of India, to promote thee shorter settlement cycle. Even if T+1 will be optional starting off, they argue that it will lead to problems in adjusting the settlement processes that involve their own people, the custodians in India, depositories, clearing corporations and banks.
ANMI, one of the pan-India brokers’ bodies, has been working against the new development for several months, according to the article in Times of India. The key arguments are that the introduction of T+1 cycle will increase working capital requirement for brokers, extend working hours for banks and depositories, and increase settlement risks – as well as margin requirements – due to failure in matching trades by FPIs (Foreign Portfolio Investments).