SEBI launches T+0 settlement framework for 25 scrips in equity cash segment

Market regulator SEBI on Thursday, March 21, released a framework for introducing the beta version of T+0 settlement, or same-day settlement, on an optional basis in addition to the existing T+1 settlement cycle.

The Securities and Exchange Board of India (SEBI) has implemented the framework in the equity cash segment for 25 scrips, initially targeting a limited set of brokers. All investors will be allowed to participate in this segment, with trading hours set between 9:15 am and 1:30 pm.

At the SEBI board meeting held on March 15, the regulator approved the launch of the beta version of the T+0 settlement, with effect from March 28.

In a circular dated March 21, the market watchdog said that after detailed deliberations and approval of the regulatory body's board, "it has been decided to put in place a framework for the introduction of the Beta version of T+0 settlement cycle on an optional basis in addition to the existing T+1 settlement cycle in the equity cash market, for a limited set of 25 scrips and with a limited number of brokers".

The SEBI circular further said that there has been a significant evolution of technology, architecture, and capacity of market infrastructure institutions (MIIs), presenting opportunities for further advancement in clearing and settlement timelines.

It is noted that the country's depository ecosystem has visibility of individual client-level holdings in digital form. It can effect the immediate transfer of securities. Also, India's payments and settlements ecosystem has long allowed for the real-time transfer of funds.

On how it will help the entire settlement ecosystem, the regulator said the move to shorten the settlement cycle will facilitate cost and time efficiency. It will also help in bringing transparency in charges for investors. The move will strengthen risk management at clearing corporations, according to SEBI.