SEBI expands optional T+0 settlement for top 500 stocks in phased rollout

The Securities and Exchange Board of India (Sebi) on Tuesday expanded the scope of its optional T+0 (same day) settlement cycle to cover the top 500 stocks by market capitalisation.

In a circular, the markets regulator announced that the phased rollout of the T+0 settlement option would commence on January 31, 2025, with the bottom 100 companies among the top 500 stocks being integrated first.

The list will gradually expand by 100 companies each month until all 500 stocks are covered, the circular said.

The T+0 settlement, introduced in a beta version earlier this year for 25 stocks, enables same-day settlement of trades compared to the existing T+1 cycle, where settlement occurs the next trading day.

Based on feedback, Sebi has decided to expand the scope of the optional T+0 settlement cycle. All stock brokers have been allowed to join the optional T+0 framework. Sebi also permitted brokers to levy differential brokerage rates for T+0 and T+1 settlement cycles, provided the charges remain within regulatory limits.

Sebi outlined a mechanism for block deal transactions under the T+0 cycle, which will be available exclusively during a morning session from 8:45 am to 9:00 am. Participation is optional, and trades here will settle on the T+0 cycle.

The regulator asked Qualified Stock Brokers (QSBs) with a minimum number of active clients as of December 31, 2024, must implement systems for seamless T+0 participation. Further, new QSBs have three months to adopt these systems after any list updates.

Market Infrastructure Institutions (MIIs), including stock exchanges and clearing corporations, have been directed to publish operational guidelines and a list of eligible stocks and QSBs for the T+0 settlement option.

Sebi said that provisions for expanded scrips, broker participation and operational guidelines will take effect from January 31, 2025, while those related to QSBs, custodians, and block deal windows take effect from May 31, 2025.