SEBI introduces same-day stock settlement: Trial of T+0 rolling cycle for 25 scrips with limited brokers on March 28, 2024

The implementation of this initiative is scheduled for March 28, 2024.

SEBI is rolling out a trial version of the T+0 rolling settlement cycle for stocks, allowing for same-day settlement of trades, alongside the existing T+1 cycle. Initially, this will involve a selected group of 25 stocks and a limited number of brokers.

This move follows recommendations from a working group consisting of Market Infrastructure Institutions (MIIs), incorporating public feedback and suggestions from SEBI's Risk Management Review Committee. The implementation of this initiative is scheduled for March 28, 2024.

Earlier, on September 07, 2021, SEBI approved the transition to a T+1 settlement cycle, which was successfully executed in phases by January 27, 2023, with the cooperation of all stock exchanges, clearing corporations, and depositories.

Advancements in technology and infrastructure within MIIs have paved the way for faster clearing and settlement processes. India's robust depository ecosystem enables seamless digital oversight of individual customer holdings, facilitating instantaneous securities transfers. Moreover, the country's payments and settlements network support real-time money transfers.

The circular issued by SEBI emphasizes that reducing the settlement cycle enhances cost and time efficiency, transparency, and risk management within the securities market ecosystem.

Operational Guidelines

• Eligible Investors: All investors can partake in the segment for the T+0 settlement cycle provided they adhere to the timelines, processes, and risk requirements prescribed by the MIIs.
• Surveillance Measures: The surveillance measures applicable in the T+1 settlement cycle shall extend to scrips in the T+0 settlement cycle.
• Trade Timings: Trading will occur in a single continuous session from 09:15 AM to 1:30 PM.
• Price Band: The price band in the T+0 segment will operate with a margin of +100 basis points from the price in the regular T+1 market. This band will be recalibrated after every 50-basis point movement in the underlying T+1 market.
• Index Calculation and Settlement Price Computation: T+0 prices will not factor into index calculation and settlement price computation. There will be no distinct closing price for securities based on trading in the T+0 segment.

Disclaimer: The article is for informational purposes only and not investment advice.