T+0 settlement beta version to be launched on March 28, 2024

Last week, the market watchdog Securities and Exchange Board of India (SEBI) issued a circular for launching the beta version of T+0, or same-day settlement, on an optional basis.

"Pursuant to deliberations and the approval of the board, it has been decided to put in place a framework for the introduction of the beta version of the 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,” read SEBI’s circular.

T+0 settlement, introduced by Sebi, will enable same-day settlement of trade as the transaction occurs, thus transitioning from the conventional T+2 settlement cycle. The new process is aimed at strengthening the country’s capital markets, improving market efficiency, and reducing transactional risks.

Furthermore, as per Zee Business research desk inputs, the beta version of T+0 settlement will be launched on Thursday, March 28, 2024, and initially, T+0 settlement will take place for as many as 25 scrips during the trading session from 9:15 am to 1:30 pm, which will be in effect by 4:30 p.m. on the same day.

Going forward, the T+0 settlement will be implemented in all the scrips in phases.

Understanding trade settlement cycle in India

From 2003, the country’s capital market has been following a T+2 rolling settlement cycle that means the settlement takes place on the second trading day ( except for weekends and market holidays) post the trade execution date (T).  For instance, if you buy or sell scrips of ‘X’ company, the settlement will happen on Wednesday (T+2 days). Before 2002, T+ 5 day settlement cycle was followed as per the research desk.