Published by: Mohammad Haris
Latest version: November 26, 2023, 10:07 IST
Sebi Chairperson Madhabi Puri Buch.
Sebi wants T plus zero (T+0) settlement rules to come in from March-end 2024 and T plus instant settlement after 12 months, Sebi Chairperson Madhavi Puri Buch said.
Capital markets regulator Sebi aims to introduce same-day trade settlement on stock exchanges by March 2024 and eventually real-time settlement, its chairperson Madhavi Puri Buch said on Saturday. Meanwhile, the watchdog has reduced the settlement deadline to one day.
“Sebi wants T plus zero (T+0) settlement rule from March-end 2024 and T plus instant settlement from 12 months”. T+0 means same day transaction and instant settlement means settlement of transactions on real time basis.
According to Buch, market markers feel that it makes better sense to move directly from the T+1 hour to the T+ instant because there is no benefit to be drawn from the T+0 intermediate ground. The investment banker-turned-regulator said Sebi is “fully open” to market makers’ suggestions for immediate trade settlement.
He said the new settlement would be parallel to the existing settlement system and would be entirely optional. Moreover, it will be available on select major products and even optional to opt for.
The country’s stock markets have moved to T+1 settlement, where transactions are settled on the next business day, in January this year. Earlier it was T+2 system. The changes from T+2 to T+1 and T+1 hours have been uneventful in terms of infrastructure, he added.
Sebi’s plans depend on the success of the newly launched application backed by a locked-in amount (ASBA) for secondary market transactions. Earlier, some foreign portfolio investors expressed concerns about shortening the settlement cycle, citing foreign exchange-related concerns.
In July, the Chairperson announced that Sebi aimed to introduce instant settlement of transactions on stock exchanges by the next fiscal year. Later, in September, a Sebi official said the regulator would introduce one-hour trade settlement by the end of this fiscal, to expedite such processes.
(This story has not been edited by News18 staff and appears from a syndicated news agency feed – PTI)
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