The much-anticipated T+0 settlement in the Indian capital market will come live on the exchanges on an optional basis from March 28.
The Securities and Exchange Board of India introduced a beta framework for the T+0 settlement cycle, which will be a continuous session between 9:15 a.m. and 1:30 p.m. Following this, the regulator will take one year to move to instant settlement by March next year.
NDTV Profit decodes the latest development and its impact on investors.
What Is T+0 Settlement?
The T+0 Settlement aims to settle trades on the same day, which means that the seller of stocks will receive money on the day of sale.
Currently, the settlement happens on the T+1 cycle, which means that the funds are settled by the next day of trade. It was introduced in 2021 in a phased manner and was then fully implemented in January 2023.
Advantages
The major benefit to an investor is the same-day receipt of funds and securities to the investor.
Market Timings Of T+0 Settlement
The market timing for the new settlement will be one continuous session from 9:15 a.m. to 1.30 p.m.
Further simplified:
SEBI has proposed the implementation in two phases for the equity cash segment. In addition to the existing T+1 settlement cycle, the shorter settlement cycle will be introduced as an option.
In Phase 1: An optional T+0 settlement cycle—for trades till 1:30 p.m.—is envisaged, with the settlement of funds and securities to be completed on the same day by 4:30 p.m.
In Phase 2: An optional immediate trade-by-trade settlement may be carried out. In the second phase, trading will be carried out till 3.30 p.m.
After the implementation of phase 2 (optional instant settlement), the mechanism of optional T+0 settlement implemented under phase 1 will be discontinued.
Identifiers For T+0 Settled Securities
Series and settlement type/cycle fields can be used to identify T+0 settled securities in security master.
For T+0: series will be 'T0', and settlement shall be '0'.
Days When Trading Will Not Be Conducted In T+0 Settled Securities
On ex-date of any corporate action in corresponding T+1 settled security
On the day of index rebalancing of the corresponding T+1 settled security.
On the settlement holiday
Who Can Trade?
All members eligible to trade in the capital market segment shall be able to trade in T+0 settled securities.
Can A Separate Trade Report Be Downloaded?
No.
A separate exchange trade report for T+0 trade cannot be downloaded.
The details of trades done in T+0 market shall be available in the existing reports which are downloaded to members.
Trades In T+0 Settlement Eligible For Bulk Reporting?
Yes.
The trades done in T+0 settlement shall be eligible for bulk reporting.
Possible To Change The Settlement Type?
No.
Once traded in T+0, it is not possible to change the settlement type.
Orders for T+0 and T+1 settled securities are executed in separate series.
