InvestorQ : Do you see any shortcomings in the T+1 system of exchange settlement?
Sam Eswaran made post

Do you see any shortcomings in the T+1 system of exchange settlement?

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Moii Chavate answered.
3 months ago
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It could be a tax complicated since T+2 and T+1 settlements will co-exist. However, the problem for traders is that T+1 will not be allowed to be netted against T+2. That would mean additional margins for stocks that are in T+1. It is possible that shifting to T+1 could impact liquidity. Also, the 1 month notice is too long as it could provide fertile ground for speculators to indulge in speculative buying or even bear hammering of the stock.

The bigger question is whether this T+1 can really add value? To be frank, the 100% peak margins are already a bottleneck for credit realization and use immediately. The ideal way would have been to make a full shift to T+1 since banking is already geared to it. The idea of trying to be a fish and a fowl is not really helping as exchanges may find it practically difficult choice to shift a stock to T+1. For traders, it may really not add value.

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