T+0 settlement by March 2024
India moving from T+2 to same-day settlement of trades: Sebi chief
image for illustrative purpose
We have created huge risk mitigation measures in the market - Madhabi Puri Buch, chairperson, Sebi
Earn Investors’ Trust
- Instantaneous settlement is optional
- Risk in the system comes down
- Technology and market stack in India are unparalleled
New Delhi: Sebi chief Madhabi Puri Buch on Friday said the capital markets regulator is ready to introduce same-day settlement of trades on the stock exchanges by March 2024. Speaking at the Global Economic Policy Forum 2023 organised by the Confederation of Indian Industry (CII), Buch said, “we are ready to introduce T+0 (T plus zero) settlement trade by the end of the current fiscal.”
The regulator, which has already reduced the settlement timelines to as short as one day after the transaction, is now looking to shorten the same further. The Sebi chief talked about the T+1 regime that has been implemented in the market. Earlier this year, the country’s stock markets transitioned from T+2 to T+1 settlement, settling trades on the following business day.
“It takes two things to make this happen. First is technology and second is co-creation. We are now moving to T+0 which will happen before the end of this financial year and one year from there we will have instantaneous settlement, which is optional. When we do this, risk in the system comes down,” Buch said here.
“The two reasons why we have been able to bring T+1 to the people are stellar technology - the technology and market stack in India are unparalleled and have been acknowledged as one of the best in the world. Second being the co-creation with the institution and creating a methodology of regulations with them,” she said.
Addressing the session on ‘Building Resilient Capital Markets: Strategies and Way Forward’, she said that trust is the first element of market foundation and risk management is important for building this trust. According to her, it is very crucial to earn the trust of investors in the market and risk mitigation through technology has facilitated in building that trust. “Up until now we had the potential, but we did not have the tools to manifest that potential. Today with technology, we have the tool to manifest this potential and take it to the farthest corner of our country. Technology enables us to make businesses viable,” Buch said.
