T+0 settlement : SEBI
The Securities and Exchange Board of India (SEBI) recently approved the launch of the beta version of the T+0 settlement on an optional basis.
- T+0 Settlement means that the funds and securities for a transaction will be settled on the day the trade was entered.
- At present, the Indian securities markets operate on a T+1 settlement cycle, where the settlement happens on the next day of trade.
- In 2002, the regulator cut down the settlement period from T+5 to T+3, and in 2003, SEBI further reduced it to T+2. In 2021, the T+1 settlement started and was gradually implemented, with the final phase completed in January 2023.
- Instant receipt of funds and securities to the investor. It will eliminate the risk of any kind of settlement shortage and give greater control over funds and securities to the investor.
- There is expected to be lower counterparty risk and increased liquidity in the market.
