SEBI Introduces Same-Day Settlement Cycle: Operational Guidelines

SEBI on Thursday issued operational guidelines for the introduction of the beta version of same-day (T+0) settlement cycle for the equity cash market.

This will be rolled out from March 28 on an optional basis for a limited set of 25 scrips and with a limited number of brokers. Same-day settlement will be in addition to the existing T+1 settlement cycle and will be a precursor to instant settlement that may be rolled out on an optional basis at a later date.

A shortened settlement cycle will bring cost and time efficiency, transparency in charges to investors and strengthen risk management at clearing corporations and the overall securities market ecosystem.

“The significant evolution of technology, architecture and capacity of MIIs, presents opportunities for further advancing clearing and settlement timelines. Further, India’s depository ecosystem has visibility of individual client level holdings in digital form, and so has the ability to effect immediate transfer of securities and also India’s payments and settlements ecosystem has long allowed for real time transfer of funds,” SEBI said in a circular on Thursday.

The fine print

All investors are eligible to participate. T+1 surveillance measures will apply to scrips in T+0 settlement cycle as well. The trading session will be from 9:15 am to 1:30 pm. The T+0 segment will operate with a price band of +/-100 basis points from the price in the regular T+1 market. This band will be recalibrated after every 50 basis points movement in the underlying T+1 market.

T+0 prices will not be considered in index calculation and settlement price computation. There will be no separate close price for securities based on trading in T+0 segment. There shall be no netting in pay-in and pay-out obligations between T+1 and T+0 settlement cycle.