SEBI to launch T+0 settlement by March 2024: A major development for Indian stock markets

The Securities and Exchange Board of India (SEBI) is gearing up to introduce same-day settlement of trades, known as T+0 settlement, by the end of the financial year 2023-24.

What is the significance of this move for Indian investors?

This move would allow Indian investors to enjoy same-day settlement in the markets, marking a significant advancement from the current T+1 settlement system.

What did SEBI Chairperson Madhabi Puri Buch mention about the proposed T+0 settlement?

Madhabi Puri Buch stated that SEBI intends to implement the T+0 settlement norm by March-end 2024, followed by T+instantaneous settlement 12 months thereafter.

What are the views regarding the transition directly from T+1 hour to T+instantaneous settlement?

Market markers have suggested that it might be more practical to transition directly from T+1 hour to T+instantaneous settlement, stating that there's no significant benefit in adopting the intermediate T+0 settlement.

 What does instantaneous settlement mean in terms of trade settlement?

Instantaneous settlement ensures trades are settled immediately on the same day, offering a streamlined and efficient transaction process.

Madhabi Puri Buch highlighted the importance of advancements in technology and co-creation in achieving the T+1 settlement system, underscoring the subsequent elevation of trust in the system.

 Additionally, SEBI is looking into the implementation of ASBA (Applications Supported by Blocked Amount) for the secondary market, expected in January or February. 

This move aims to facilitate investors by allowing their money to earn interest while sitting in their account until the trade occurs, subsequently debiting the funds only upon trade execution.