Sebi to introduce same-day settlement of trades from March 2024; real-time settlement later

Sebi had recently reduced the settlement timelines to one day

madhabi-puri-buch-sebi [File] Madhabi Puri Buch | LinkedIn

The Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch, on Saturday, said the market regulator is planning to introduce same-day settlement of trades on stock exchanges by March 2024.

Eventually, there will be instantaneous settlement of trades.

"Sebi wants the T plus zero (T+0) settlement norm to be in place from March-end 2024 and T plus instantaneous settlement 12 months from thereon," Buch said.

T+0 refers to the same-day settlement of trades and instantaneous settlement means settling the transactions on a real-time basis.

Sebi had recently reduced the settlement timelines to one day. The changes from T+2 to T+1 and T+ 1 hour have been eventless from an infrastructure point of view, she said.

She said market markers are of the view that it makes better sense to move directly from T+1 hour to T+instantaneous as there is no benefit to be drawn from the middle ground which is T+0.

"We had said that we would move optionally to one-hour settlement and then move to instantaneous. Now what the market infrastructure and the brokers together have come back and told us is that the technology path that they need to take to get to instantaneous settlement will be much better if the first step we take is not a one-hour settlement but T+0. So, there is an in-between step that has undergone a change based on the consultation," Buch was quoted as saying.

The short span of settlement helps investors to make better use of their capital.

She said that the new settlement will be parallel to the existing settlement system and will fully be optional.

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