SEBI board announces enhancements to T+O settlement cycle; number of scrips to be increased

an optional Block Deal window mechanism will be introduced under the T+0 settlement cycle (operating from 8:45 am to 9 am), alongside the existing block windows under the T+1 settlement cycle.

The Securities and Exchange Board of India (SEBI) announced significant enhancements to the optional T+0 settlement cycle following a review of its Beta version and feedback from various stakeholders. This announcement was made post the September 30 board meeting.

Firstly, the number of scrips eligible for trading under the optional T+0 settlement cycle will be gradually expanded from the current 25 to include the top 500 stocks based on market capitalization.

Secondly, all registered stock brokers will have the opportunity to offer access to the optional T+0 settlement cycle to their clients and are permitted to charge differential brokerage fees for transactions conducted under this expedited settlement cycle.

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In order to facilitate seamless participation in the optional T+0 settlement cycle, SEBI has mandated that brokers designated as Qualified Stock Brokers (QSBs) must establish systems to accommodate their clients effectively. Additionally, these QSBs must meet a minimum threshold of active clients to qualify. Custodians are also required to implement the necessary systems. SEBI will provide an appropriate timeframe for implementation, determined through consultations with all relevant stakeholders.

Additionally, an optional Block Deal window mechanism will be introduced under the T+0 settlement cycle (operating from 8:45 am to 9 am), alongside the existing block windows under the T+1 settlement cycle. However, the release noted that the earlier proposal to transition from optional T+0 settlement to optional instantaneous settlement is currently not under consideration. The optional T+0 settlement in the equity cash market will also continue to coexist with the existing T+1 settlement cycle.