Settlement Holiday
What is a settlement holiday?
A settlement holiday is a day when the stock market is open for trading, but the actual exchange of shares and money (called settlement) doesn’t happen.
What is a settlement?
When you buy or sell shares, the money and shares don’t move instantly in or out of your demat and trading account. The process of transferring shares to the buyer and money to the seller is called settlement. This is handled by the National Clearing Corporation (NCC) — not directly by the stock exchanges like NSE or BSE.
Why does settlement take time?
On a settlement holiday, either the clearing corporation, the banks, or both are closed. So, trades from the previous trading day are settled on the next working day instead.
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