SEBI Instant Settlement Update: Stock market regulator SEBI (Securities and Exchange Board of India) has released the framework to implement the beta version of T+0 trade settlement on an alternative basis. In the initial phase, T+0 trade settlement is being started in 25 shares through only a few brokers. SEBI is going to start T+0 trade settlement cycle on optional basis from March 28.
The circular explains why T+0 trade settlement is important for investors. According to the circular, the technology, architecture and market infrastructure capabilities of institutions are providing the opportunity to expedite clearing and settlement timelines. According to the circular, keeping the settlement cycle short will save cost and time. There will be transparency in the charges levied on investors.
In the second week of this month, SEBI Chairperson Madhabi Puri Buch had said that SEBI is going to start the T+0 trade settlement cycle on an optional basis from March 28. SEBI Chief had hinted at starting settlement on the day of trading in the stock market from the month of March and had assured of instant settlement within 12 months. At present the provision of T+1 trade settlement is applicable in the Indian market. SEBI had said in the consultant paper seeking suggestions on instant settlement that, in today's era, reliable, low cost and fast transactions are such features which attract investors very much. In such a situation, reducing the settlement time for buying and selling of shares will help in attracting investors towards this asset class.
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