Settlement Express: Trading Time Travel from T+1 to T+0

SEBI introduces a beta T+0 trade settlement cycle alongside T+1 for 25 scrips with select brokers. A single continuous session will run from 09:15 am to 1:30 pm. Surveillance measures currently applied in the T+1 settlement cycle will also extend to scrips in the T+0 settlement cycle.

The settlement cycle evolved from T+5 in 2002, then to T+2 in 2003. Subsequently, a phased introduction of T+1 settlement began in 2021, culminating in full implementation by January 2023

Recent advancements in payment systems, alongside the adoption of sophisticated technologies by Tech Infrastructure offers additional opportunities to enhance clearing and settlement timelines, optionally.

SEBI elaborates on the Features & benefits of T+0, such as

• Instant Transactions: Allows immediate receipt of funds and securities, replacing T+1 system.
• Risk Reduction: Eliminates settlement shortages by requiring pre-availability of funds and securities, reducing market and CC risk exposure.
• Investor Control: Enhances investor protection with direct crediting of funds and securities into client accounts or member pool accounts.
• Market Competitiveness: Establishes Indian equities as resilient, cost-effective assets with superior transaction efficiency.
• Overall Improvement: Enhances market efficiency and investor experience, promoting market integrity and attractiveness.
• The choice is anticipated to offer flexibility by expediting the pay-out of funds to sellers and the pay-out of securities to buyers.
• This will enable investors to exercise better control over their funds and securities.
• A shorter settlement cycle will release additional capital in the securities market, thus improving overall market efficiency.
• Strengthen the overall risk management of CCs, as trades will be supported by upfront funds and securities.