Sebi releases consultation paper on implementation of instant trade settlement: What it says
Sebi proposed implementation of instant trade settlement in two phases
- Dec 22, 2023,
- Updated Dec 22, 2023 7:50 PM IST
Market regulator Securities and Exchange Board of India (Sebi) on Friday released a consultation paper on introduction of optional T+0 settlement cycle and instant settlement cycle and has sought comments.
Sebi proposed implementation of instant trade settlement in two phases.
In phase 1, the regulator has proposed an optional T+0 settlement cycle for trades till 1:30 pm, with settlement of funds and securities to be completed on the same day by 4:30 pm.
In phase 2, an optional immediate trade-by-trade settlement for funds and securities may be carried out. In the second phase, trading will be carried out till 3.30 pm, the consultation paper said. After omplementation of phase 2, phase 1 (optional T+0 settlement) will be discontinued, the paper said.
Earlier this month, Sebi chief Madhabi Puri Buch said the capital markets regulator is ready to introduce same-day settlement of trades on the stock exchanges by March 2024.
Speaking at the Global Economic Policy Forum 2023 organised by the Confederation of Indian Industry (CII), Buch said, "We are ready to introduce T+0 (T plus zero) settlement trade by the end of the current fiscal".
The regulator, which has already reduced the settlement timelines to as short as one day after the transaction, is now looking to shorten the same further.
The Sebi chief talked about the T+1 regime that has been implemented in the market. Earlier this year, the country's stock markets transitioned from T+2 to T+1 settlement, settling trades on the following business day.
"It takes two things to make this happen. First is technology and second is co-creation. We are now moving to T+0 which will happen before the end of this financial year and one year from there we will have instantaneous settlement, which is optional. When we do this, risk in the system comes down," Buch said.
"The two reasons why we have been able to bring T+1 to the people are stellar technology - the technology and market stack in India are unparalleled and have been acknowledged as one of the best in the world. Second being the co-creation with the institution and creating a methodology of regulations with them," she said.
With inputs from PTI
Market regulator Securities and Exchange Board of India (Sebi) on Friday released a consultation paper on introduction of optional T+0 settlement cycle and instant settlement cycle and has sought comments.
Sebi proposed implementation of instant trade settlement in two phases.
In phase 1, the regulator has proposed an optional T+0 settlement cycle for trades till 1:30 pm, with settlement of funds and securities to be completed on the same day by 4:30 pm.
In phase 2, an optional immediate trade-by-trade settlement for funds and securities may be carried out. In the second phase, trading will be carried out till 3.30 pm, the consultation paper said. After omplementation of phase 2, phase 1 (optional T+0 settlement) will be discontinued, the paper said.
Earlier this month, Sebi chief Madhabi Puri Buch said the capital markets regulator is ready to introduce same-day settlement of trades on the stock exchanges by March 2024.
Speaking at the Global Economic Policy Forum 2023 organised by the Confederation of Indian Industry (CII), Buch said, "We are ready to introduce T+0 (T plus zero) settlement trade by the end of the current fiscal".
The regulator, which has already reduced the settlement timelines to as short as one day after the transaction, is now looking to shorten the same further.
The Sebi chief talked about the T+1 regime that has been implemented in the market. Earlier this year, the country's stock markets transitioned from T+2 to T+1 settlement, settling trades on the following business day.
"It takes two things to make this happen. First is technology and second is co-creation. We are now moving to T+0 which will happen before the end of this financial year and one year from there we will have instantaneous settlement, which is optional. When we do this, risk in the system comes down," Buch said.
"The two reasons why we have been able to bring T+1 to the people are stellar technology - the technology and market stack in India are unparalleled and have been acknowledged as one of the best in the world. Second being the co-creation with the institution and creating a methodology of regulations with them," she said.
With inputs from PTI