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Settlement holiday today: Impact on Money and Shares After Recent Trades

In a recent development, trades conducted in the equity and derivative segments on September 29 and the preceding day will experience a settlement delay, with the settlement date now set for October 4. This delay is due to the observance of Eid-e-Milad, leading stock exchange clearing houses to designate it as a settlement holiday.

The NSE (National Stock Exchange) and BSE (Bombay Stock Exchange) decided to shift the settlement holiday to September 29 following decisions by the Reserve Bank of India (RBI) and the Maharashtra government to move it by a day.

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On a settlement holiday, there are no settlements, and no deliveries of stocks occur. Any holiday occurring between the trade day and the settlement date can result in a delay in the final transfer of shares. This is because the settlement date represents the complete transfer of ownership of the shares, distinct from the actual trading day.

While trading in the equity markets continues as usual on a settlement holiday, clearing and settlement processes, including the Payin and Payout of stocks and funds, remain suspended.

It is important to note that a trading holiday is distinct from a settlement holiday, as trading holidays entail the complete closure of stock markets, with no trading activity taking place.

For investors who made purchases on September 28 and September 29, their holdings will reflect as T1 holdings on September 29. However, it’s essential to be aware that selling these holdings won’t be possible until October 4, primarily because October 2 is also designated as both a trading and settlement holiday in observance of Gandhi Jayanti.

Trading holidays and settlement holidays serve as a respite for market participants from regular trading and settlement operations. The upcoming settlement holidays to be aware of are October 2 and October 24 (Dussehra), with both days also designated as trading holidays. Subsequent settlement holidays include November 14 (Diwali), November 27 (Guru Nanak Jayanti), and December 25 (Christmas).

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