What is a settlement cycle?
A settlement cycle on the Exchange is an account period for the securities traded on the exchange. At the end of this period, the obligations of each client are calculated and the clients settle the respective obligations as per the rules, bye laws and regulations prescribed by the Clearing House.
In a rolling settlement, each trading day is considered as a trading period and trades executed during the day are settled based on the net obligations for the day. At NSE, trades in rolling settlement are settled on a T+2 basis i.e. on the 2nd working day. For arriving at the settlement day all intervening holidays, which include bank holidays, NSE holidays, Saturdays and Sundays are excluded. Typically trades taking place on Monday are settled on Wednesday, Tuesday’s trades settled on Thursday and so on.
