T+0 Settlement Cycle For Top 500 Stocks To Be Available From Jan. 31 Onwards: SEBI

The optional T+0 settlement cycle for top 500 stocks in terms of market capitalisation will be available from Jan. 31, 2025 onwards, according to a circular issued by the Securities and Exchange Board of India on Tuesday.

The scope of T+0 settlement cycle will be gradually enhanced, with the bottom 100 out of the top 500 scrips to be eligible in the first phase of widening, the market regulator said.

"The scrips shall be made available for trading and settlement starting with scrips at bottom 100 companies out of the aforesaid 500 companies and gradually include the next bottom 100 companies every month till top 500 companies are available for trading in optional T+0 settlement cycle," the circular stated.

Notably, T+0 refers to the settlement cycle which ensures that the shares are credited in the demat account of the investor on the same day of trade. The initiative was first approved in March for non-custodian clients, sand launched in a beta version on the exchanges

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

All stock brokers are allowed to participate in the optional T+0 settlement cycle, SEBI said, while noting that the brokers are "permitted to charge differential brokerage for T+0 and T+1 settlement cycles, within the regulatory limit."

The SEBI circular also noted that a a mechanism for block deal window would be put in place by the stock exchanges under the optional T+0 settlement cycle.

"The block deal window under the optional T+0 settlement cycle shall be available only for the morning session during 8:45 am to 9:00 am in addition to the existing block deal windows of 8:45 am to 9:00 am and 2:05 pm to 2:20 pm for T+1 settlement cycle," it stated.

To ensure smooth implementation, the market infrastructure institutions will publish the operational guidelines, including mechanism for trading, clearing and settlement and risk management on their websites, SEBI noted.

MIIs would also be required to share the list of eligible scrips for the optional T+0 settlement cycle on their websites, it added.