Merge Settlement happens when a trading holiday and a settlement holiday fall on back-to-back days, pushing your normal T+1 settlement forward.
For example: Let’s say Tuesday is a trading holiday and Wednesday is a settlement holiday.
If you buy shares on Monday:
- Your shares will not be credited on Tuesday as usual and they will be credited to your Demat account only on Thursday
- You cannot sell those shares on Wednesday since they are not yet in your account. If you sell, there are chances your trade will go into auction
- You cannot pledge those shares on Wednesday for margins as they are not available yet
If you sell shares on Monday:
- Your funds will not be available on Tuesday and they will settle only on Thursday
- Withdrawal of unsettled funds of Monday can be directly placed on Thursday
- You will not be able to place new orders on Wednesday using those unsettled funds, the balance will not reflect as available
- Any MTM profits from F&O will also be credited only on Thursday
- Margin requirements may still apply on Wednesday and ensure you maintain sufficient balance in your account to avoid any shortfall
During a Merge Settlement period, always plan your trades, withdrawals, and margin requirements in line with the revised settlement date.
Easy & quick
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