December 10, 2023
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Sebi to bring in T+0 settlement by year-end
The Indian stock market transitioned from T+2 to T+1 settlement in January 2023, allowing investors to access securities and funds faster.
Now, the Securities and Exchange Board of India (Sebi), the capital markets regulator, is preparing to introduce same-day settlement of trades, known as T plus zero (T+0) settlement, by the end of the current financial year 2023-24, its Chairperson Madhabi Puri Buch said on Friday.
The aim is to have the T+0 settlement norm in place by March-end 2024, followed by T plus instantaneous settlement within the next 12 months, the Sebi Chairperson said at an event organised by the CII.
This move comes after the regulator already reduced settlement timelines to as short as one day. Market makers have suggested skipping T+0 and moving directly to T+ instantaneous settlement, a suggestion that SEBI is open to considering.
The Indian stock market transitioned from T+2 to T+1 settlement in January 2023, allowing investors to access securities and funds faster.
As per Buch, market markers believe it would be more sensible to transition from T+1 hour settlement to T+instantaneous settlement, as there is no significant advantage to be gained from the intermediary T+0 timeframe.
Buch added that Sebi is receptive to the suggestions from market makers regarding implementation of instantaneous trade settlement.
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