T+0 settlement by March 2024, instantaneous settlement in 2025, both to co exist: SEBI Chief

SEBI Chairperson Madhabi Puri Buch (File pic)

SEBI Chief Madhabi Puri Buch announced on November 25 that a roadmap has been devised for the same-day settlement of trades by March 2024, followed by an optional parallel system for instantaneous settlement.

Addressing a press conference in Mumbai after SEBI's Board meeting, Buch stated that for instantaneous settlement, market infrastructure and brokers have emphasized the need for a technological path where the interim step should not be a one-hour delay but rather move directly from T+0 to instantaneous.

Buch expressed satisfaction with the progress, stating, "The progress is very good, a lot of discussion has happened. A roadmap is pretty much ready. It is a parallel system that is completely optional."

Regarding the timeline, she explained, "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."

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India transitioned to T+1 settlement, where trades are settled the next business day, in January this year.

Earlier, reports said the market regulator’s plan to allow the settlement of equity market trades within the same day was facing pushback from offshore investors who fear it will lead to a fragmented system and add to the cost of trading.

To transact and settle a trade within the same day, a foreign investor would need to convert funds into Indian rupees a day prior to the trade. In T+1 and T+2, rupees can be obtained on the day of settlement.