What is clearing holiday in stock market?

A clearing holiday in the stock market refers to a day when the clearing process, which involves the finalization and settlement of trades, does not take place. While trading activities may continue on the exchange, the clearing house, which is responsible for ensuring that transactions are properly settled, remains closed.

During a clearing holiday:

• Trades executed on the stock exchange cannot be cleared or settled.
• The actual transfer of securities and funds between buyers and sellers is delayed.
• The clearing process resumes on the next business day.

Clearing holidays typically occur due to public holidays or bank holidays and are scheduled according to the clearing house's calendar. The settlement of trades, which typically follows a T+2 (trade date + two business days) cycle, is postponed during this period.