T+0 Settlement Simplified: Impact On All Investors And Everything Else You Need To Know

The much-anticipated T+0 settlement in the Indian capital market will come live on the exchanges on an optional basis from March 28.

The Securities and Exchange Board of India introduced a beta framework for the T+0 settlement cycle, which will be a continuous session between 9:15 a.m. and 1:30 p.m. Following this, the regulator will take one year to move to instant settlement by March next year.

NDTV Profit decodes the latest development and its impact on investors.

The T+0 Settlement aims to settle trades on the same day, which means that the seller of stocks will receive money on the day of sale.

Currently, the settlement happens on the T+1 cycle, which means that the funds are settled by the next day of trade. It was introduced in 2021 in a phased manner and was then fully implemented in January 2023.

The major benefit to an investor is the same-day receipt of funds and securities to the investor.

The market timing for the new settlement will be one continuous session from 9:15 a.m. to 1.30 p.m.

Further simplified:

SEBI has proposed the implementation in two phases for the equity cash segment. In addition to the existing T+1 settlement cycle, the shorter settlement cycle will be introduced as an option.

• In Phase 1: An optional T+0 settlement cycle—for trades till 1:30 p.m.—is envisaged, with the settlement of funds and securities to be completed on the same day by 4:30 p.m.

• In Phase 2: An optional immediate trade-by-trade settlement may be carried out. In the second phase, trading will be carried out till 3.30 p.m.

• After the implementation of phase 2 (optional instant settlement), the mechanism of optional T+0 settlement implemented under phase 1 will be discontinued.

Series and settlement type/cycle fields can be used to identify T+0 settled securities in security master.

For T+0: series will be 'T0', and settlement shall be '0'.

• On ex-date of any corporate action in corresponding T+1 settled security

• On the day of index rebalancing of the corresponding T+1 settled security.

• On the settlement holiday

All members eligible to trade in the capital market segment shall be able to trade in T+0 settled securities.

No.

A separate exchange trade report for T+0 trade cannot be downloaded.

The details of trades done in T+0 market shall be available in the existing reports which are downloaded to members.

Yes.

The trades done in T+0 settlement shall be eligible for bulk reporting.

No.

Once traded in T+0, it is not possible to change the settlement type.

Orders for T+0 and T+1 settled securities are executed in separate series.