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.
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.
