SEBI To Beta Test T+0 Settlement From March 28

The settlement cycle will be available from March 28 between 9:15 a.m. and 1:30 p.m.

SEBI (Source: Vijay Sartape/NDTV Profit)

The Securities and Exchange Board of India on Thursday introduced a beta framework for the T+0 settlement cycle that will be available from March 28. This will be a continuous session between 9:15 a.m. and 1:30 p.m.

The board on March 15 had approved the launch of a beta version of the optional T+0 settlement for a limited set of 25 scrips and with a limited set of brokers.

Optional T+0 settlement

The beta version of the settlement cycle will be available on an optional basis, the market regulator said in a circular. All investors will be eligible to participate in the T+0 settlement cycle, it said.

The price in T+0 will operate with a price band of (+/-) 100 bps from T+1 prices. "The band will be recalibrated after every 50 bps movement in the underlying T+1 market," the circular said. The T+0 will not be used to calculate index prices and settlement price computation. The closing price for securities trading in T+0 settlement will be the same as T+0 settlement.

The surveillance measures, as applicable in T+1 settlement cycle, shall be applicable to scrips in T+0 settlement cycle, the circular said.

There will be no netting in pay-in and pay-out obligations between the T+1 and the T+0 settlement cycle.

What Is T+0 Settlement?

It refers to the process of settling trades on the same day, which means that the seller of stocks will receive money on the day of sale, instead of the earlier T+1.

The shortened settlement cycle is expected to bring cost and time efficiency, transparency in charges to investors and strengthen risk management at clearing corporations.

Also Read: SEBI To Test T+0 Settlement For 25 Stocks, Eases FPI Disclosure Norms

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