The National Securities Clearing Corporation (NSCC) has released a new settlement calendar for October 2024. This schedule outlines the Capital Market Segment’s settlement cycles, including T+1 and T+0 settlements. These changes come under Regulation 6.2 of the NSCC’s Capital Market Regulations, 1997, and could have significant implications for traders, investors, and custodians.
Key Highlights of the Settlement Calendar
Normal Rolling (T+1) Settlement:
Starts on October 1, 2024.
Concludes on October 31, 2024.
Significant dates include October 3, 7, and 14, 2024.
Normal Auction (T+1) Settlement:
Begins on October 3, 2024.
Ends on November 4, 2024.
Important dates are October 31 and November 4, 2024.
Trade for Trade (T+1) Settlement:
Runs from October 1, 2024, to November 4, 2024.
Critical for mandatory delivery and payment trades.
ITP for SME (T+1) Settlement:
Operates from October 1, 2024, to November 4, 2024.
Tailored for small and medium enterprises.
Cash Segment (T+0) Settlement:
Requires same-day settlement.
Active from October 1, 2024, to October 31, 2024.
Key dates include October 10, 17, and 24, 2024.
Key Dates to Watch
The table below provides an overview of the Normal Rolling (T+1) Settlement dates:
For the Normal Rolling (T+1) settlement type ‘M’, trading begins on October 1, 2024, and ends on October 31, 2024. The most significant dates in this segment are October 3, 7, and 14, where multiple settlements will be processed. These dates could see heightened trading activity and liquidity demands as market participants settle their trades within a day.
In the Normal Auction segment, also settled on a T+1 basis, the calendar begins with trades on October 3, 2024, and concludes on November 4, 2024. Notably, the calendar ensures that trades from October 31 will be settled by November 4, just as the market transitions into the next month.
The Trade for Trade segment follows a similar pattern, with trading activities starting on October 1, 2024, and closing on November 4, 2024. This segment is especially critical for trades that require mandatory delivery and payment, adding another layer of importance to the specific settlement dates.
The ITP for SME segment, tailored for small and medium enterprises, will also operate on a T+1 settlement cycle throughout October. This segment’s schedule mirrors that of the Trade for Trade and Auction segments, with trading dates from October 1 to November 4, 2024.
The most rapid settlements will occur in the Cash Segment, operating on a T+0 basis. This segment requires trades to be settled on the same day, emphasizing the need for immediate liquidity. The cash segment’s trading begins on October 1, 2024, and ends on October 31, 2024. Dates such as October 10, 17, and 24 will be crucial as these involve multiple transactions settled on the same day.
What These Changes Mean for Market Participants
This revised settlement calendar is likely to create significant challenges for market operations:
Increased Liquidity Demands: The T+0 settlements in the Cash Segment will require participants to maintain higher liquidity levels, as trades will need to be settled on the same day.
Operational Efficiency: The T+1 cycles will necessitate prompt actions from traders and custodians. Any delay could result in penalties and disrupt the settlement process.
Compliance: Adhering to these new schedules will be critical. Market participants must ensure they are well-prepared to avoid any operational hiccups.
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