SEBI Postpones Full Rollout Of Same-Day Settlement, Opts For Beta Version Initially

SEBI, the capital market regulator of India, has approved the launch of a Beta version of the optional T+0 settlement, following feedback from stakeholders. This settlement system requires transactions to be completed within the same day.

The Beta version will initially include a limited set of 25 shares and a select group of brokers. SEBI has not disclosed the names of the shares included in this version yet.

Additionally, SEBI plans to continue engaging with stakeholders, including users of the Beta version, for further consultation. The progress of this initiative will be reviewed by SEBI’s Board after three and six months from its implementation to determine the next steps.

SEBI has a history of adapting settlement cycles to modernize securities markets and enhance investor protection. In 2002, it reduced the settlement cycle from T+5 to T+3, followed by another reduction to T+2 in 2003. In 2021, the T+1 settlement was introduced, which was fully implemented in January 2023.

SEBI’s recent move towards an optional T+0 settlement system is part of its efforts to leverage advancements in payment systems and technology for faster clearing and settlement. The regulator had proposed two phases for implementation: Phase 1 involves T+0 settlement for trades until 1:30 PM, with funds and securities settled by 4:30 PM on the same day. Phase 2 introduces an immediate trade-by-trade settlement option, with trading permitted until 3:30 PM.

SEBI’s Chairperson, Madhabi Puri Buch, previously mentioned the regulator’s focus on developing a mechanism for instant settlements in stock exchanges. This initiative aims to provide real-time settlement, benefiting investors and enhancing market efficiency and safety, especially for retail participants, amidst the growing participation in Indian securities markets.