SEBI To Beta Test T+0 Settlement From March 28

The Securities and Exchange Board of India on Thursday introduced a beta framework for the T+0 settlement cycle that will be available from March 28. This will be a continuous session between 9:15 a.m. and 1:30 p.m.

The board on March 15 had approved the launch of a beta version of the optional T+0 settlement for a limited set of 25 scrips and with a limited set of brokers.

The beta version of the settlement cycle will be available on an optional basis, the market regulator said in a circular. All investors will be eligible to participate in the T+0 settlement cycle, it said.

The price in T+0 will operate with a price band of (+/-) 100 bps from T+1 prices. "The band will be recalibrated after every 50 bps movement in the underlying T+1 market," the circular said. The T+0 will not be used to calculate index prices and settlement price computation. The closing price for securities trading in T+0 settlement will be the same as T+0 settlement.

The surveillance measures, as applicable in T+1 settlement cycle, shall be applicable to scrips in T+0 settlement cycle, the circular said.

There will be no netting in pay-in and pay-out obligations between the T+1 and the T+0 settlement cycle.

It refers to the process of settling trades on the same day, which means that the seller of stocks will receive money on the day of sale, instead of the earlier T+1.

The shortened settlement cycle is expected to bring cost and time efficiency, transparency in charges to investors and strengthen risk management at clearing corporations.