Bombay Stock Exchange (BSE) has released the list of 25 stocks in which T+0 settlement system will start on optional basis from tomorrow i.e. March 28. This list includes other stocks including State Bank of India, Tata Communications, Union Bank of India and Vedanta. Actually, stock market regulator Securities and Exchange Board of India (SEBI) is going to start T+0 settlement system on optional basis from tomorrow. T+0 settlement means the settlement of purchase and sale of shares will happen on the same day. To understand in simple language, if you sell shares by 1:30 pm on the trading day, the money will be credited to your account by 4:30 pm on the same day. Currently the Indian stock market operates on a T+1 settlement cycle for all shares, with trade settlement taking place on the next day. Three months ago, the market regulator had issued consultation papers for T+0 and had sought public opinion on it till January 12. Six days ago, SEBI had issued 6-step guidelines for starting T+0 settlement system. All investors eligible for T+0 settlement system SEBI has said that all investors will be eligible for T+0 settlement system if they are able to meet the time limit, process and risk requirements prescribed by the Market Infrastructure Institution. T+0 settlement will be implemented in two phases. SEBI had proposed to implement T+0 settlement in two phases. Same-day settlement will be implemented in the first phase of T+0 settlement, after which buyers will get share allotment on the same day and sellers will get funds on the same day. In this, if you trade shares till 1:30 pm on the trading day, then their settlement will be done by 4:30 pm. At the same time, in the second phase, an optional immediate trade-by-trade settlement facility will be provided for all transactions done till 3:30 pm. SEBI’s 6 step guidelines for T+0 settlement Instant settlement will start by October 2024 Earlier, SEBI Chief Madhuri Puri Buch had said that we will reduce the trade settlement time to 1 hour by March next year (2024) and then by October Preparations are being made to implement trade settlement immediately by 2024. What is T+1, T+2 and T+3 settlement Settlement system means transfer of shares to the buyer’s account and 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. Suppose you sold shares on Wednesday. According to T+1, the money for these shares will be transferred to your account in 1 business day. If you have purchased shares, then these shares will be credited to your demat account within 1 day. This rule also applies in T+2 and T+3 settlements.
