As a result, transactions are carried out on September 9 (Tuesday) to DEMAT accounts only on 9 September and 8 September.
While trade fairs such as NSE and BSE remain operational on 8 September, Market Depositories NSDL and CDSL remain, so that payments, payouts and fund transfers are effectively pushed back.
This delay extends beyond shares. Auction markets and markets for currency derivatives also remain closed during the settlement holidays. This is described as a temporary “break” in back-end operations. It is also warned that settlement inhibitions can lead to liquidity pressure in the short term, limiting leverage and intraday trading options.
Derivatives can witness the volatility of volatility because participants adjust positions prior to the break. Arbitration opportunities can also shrink, because spreads of cash can increase in the absence of immediate settlements.
Some institutional investors will probably postpone major transactions until the normal regulation is taken, although the wider market effect is expected to be briefly.
The government of Maharashtra also confirmed that government offices in the city and suburbs of Mumbai will follow the revised holiday calendar, while other districts in the state will continue to observe the holiday on 5 September as planned earlier.
(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)
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