(a) whether the SEBI has introduced a new trading system on the
stock exchanges;
(b) if so, the details thereof;
(c) the advantage of this new system;
(d) whether the new system will avoid the need of actual physical
settlements of share transfers; and
(e) if so, the details thereof?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANANDRAO V. ADSUL)
(a): The Securities and Exchange Board of India (SEBI) has intimated that
it has not introduced any new trading system on the stock exchanges.
However, the settlement cycle has been shortened from T+3 to T+2
w.e.f. April 01, 2003.
(b): The Settlement cycle has been shortened from T+3 to T+2 w.e.f.
April 01, 2003 which means that the trades done on T (Trade) Day will
be settled on T+2 day. For e.g. if the trade has taken place on Monday,
the settlement would be done on Wednesday. If the trade happens on Tuesday,
the settlement would be done on Thursday.
(c): A shorter settlement cycle significantly reduces settlement risk
and increases flexibility of trading and investing. Further, market
risk management becomes far more efficacious at shorter settlement cycle.
(d): In a phased manner, SEBI has introduced dematerialisation of shares
whereby shares are now been settled in demat form. However, an additional
trading window is opened for small investors to sell physical shares
(which are in compulsory demat list) not exceeding 500 shares in number,
irrespective of their value.
(e): The additional trading window provides the facility for small
investors to sell physical shares (which are in compulsory demat list)
not exceeding 500 shares in number, irrespective of their value. This
facility is available only to registered holders of shares. Further,
the buyers of the shares are not permitted to re-introduce the shares
in the market in the physical form.