SEBI to introduce T+0 settlement trade by March 2024 and instantaneous settlement by 2025

The Securities and Exchange Board of India (SEBI) is actively developing a plan to implement same-day settlement of trades by March 2024, with an optional system for instantaneous settlement, as stated by SEBI chief Madhabi Puri. During a press conference in Mumbai following a SEBI Board meeting, Puri highlighted the shared view among market infrastructure and brokers on the need for a technological pathway to achieve immediate settlement. She emphasized the preference for a direct transition from T+0 to instantaneous settlement, avoiding a one-hour delay as an interim step. Puri noted significant progress in discussions, with a nearly finalized roadmap for the optional parallel system.

Addressing the timeline, she mentioned, “What market participants have told us is that we will need to start at T+0 and then move to instantaneous. For T+0, it will be by the end of March, then instantaneous will be another year later.” In January of the current year, India adopted a T+1 settlement system, ensuring that trades are resolved on the subsequent business day.

Earlier indications suggested that SEBI’s proposal for same-day settlement faced resistance from offshore investors, who expressed concerns about potential system fragmentation and increased trading costs. Notably, foreign investors needed to convert funds into Indian rupees one day before executing and settling a same-day trade. In the existing T+1 and T+2 settlement systems, rupees could be acquired on the settlement day.

Additionally, SEBI, during its recent meeting, declined to approve new delisting regulations citing insufficient data availability.

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