SEBI’s Settlement Update: The way of trading in the Indian share market will change soon. Let us know the details, The Securities and Exchange Board of India (SEBI) has permitted 500 companies to participate in the same-day settlement (T+0). The market regulator started this system on March 28 this year. At that time only 25 companies of both the stock exchanges i.e. BSE and NSE could settle the funds after buying and selling shares in a day.
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T+0 SEBI’s Settlement Update started in 2025
The new system will start from 31 January 2025. SEBI wants to speed up the settlement system by allowing more companies to do so. At present T+1 settlement system is prevalent in the market. That is, the day you sell the shares, the entire money will be credited to your account the next day.
On the T+0 SEBI’s Settlement Update to cover the top 500 stocks by market capitalization
The list will gradually expand by 100 companies each month until all 500 stocks are covered, the circular said.
The T+0 settlement, introduced in a beta version earlier this year for 25 stocks, enables same-day settlement of trades compared to the existing T+1 cycle, where settlement occurs the next trading day.
Based on feedback, Sebi has decided to expand the scope of the optional T+0 settlement cycle. All stock brokers have been allowed to join the optional T+0 framework. Sebi also permitted brokers to levy differential brokerage rates for T+0 and T+1 SEBI’s Settlement Update cycles, provided the charges remain within regulatory limits.
Sebi outlined a mechanism for block deal transactions under the T+0 cycle, which will be available exclusively during a morning session from 8:45 am to 9:00 am. Participation is optional, and trades here will settle on the T+0 cycle.
SEBI asked Qualified Stock Brokers
The regulator asked Qualified Stock Brokers (QSBs) with a minimum number of active clients as of December 31, 2024, must implement systems for seamless T+0 participation. Further, new QSBs have three months to adopt these systems after any list updates.
Market Infrastructure Institutions (MIIs), including stock exchanges and clearing corporations, have been directed to publish operational guidelines and a list of eligible stocks and QSBs for the T+0 settlement option.
Indian Stock Market Works on T+1 SEBI’s Settlement Update
Currently, the Indian stock market works on a T+1 settlement cycle for all shares. T+0 means the settlement of purchase and sale of shares will happen on the same day. There was a T+5 settlement system in our country before 2002.
SEBI implemented a T+3 settlement in 2002. T+2 settlement was implemented in the year 2003. The market continued to work on this system till the year 2021. After this, the T+1 system was introduced. It was implemented in January 2023. Due to this, settlement of funds and shares started taking place within 24 hours.
SEBI Introduces Optional T+0 Settlement for Top 500 Stocks 📈
— Amit (@siramitji1) December 10, 2024
Starting December 31, SEBI will offer an optional T+0 settlement cycle for the top 500 stocks by market cap. This move aims to enhance market efficiency and reduce settlement risks.#SEBI #StockMarket #T0Settlement… pic.twitter.com/A7VmhV64eM
What is T+1, T+2, &T+3 SEBI’s Settlement Update
Settlement system means the transfer of shares to the buyer’s account and the transfer of the amount of sold shares to the seller’s account. Indian stock exchanges currently follow T+1. This means that the funds and securities are credited to your account within 24 hours of order execution.
Jay Chavda He is the Founder and Writer of businesspulsecare.com. He is an I.T Engineer, Freelancer, Businessman. He posts Business, Stock/Share Market, Finance Related News and updates on the website. 🔗