Stock exchanges set to introduce T+0 settlement for select stocks, parallel to T+1. SEBI to monitor progress. Vamsi Krishna lauds benefits while concerns about market volatility persist. Transition from T+1 required infrastructure changes. Cash market volumes may decline.
T+0 settlement cycle will be available along with the current T+1 cycle. It is optional. Prices of stocks trading under T+0 will not be considered in index calculation and settlement price computation.
Trade settlement is the process of transferring securities and funds between buyers and sellers after a trade is executed. The shorter the settlement cycle, the faster investors can access the securities and funds. Currently, the Indian stock market operates on a T+1 settlement cycle for all scrips.
On March 21, the Sebi issued the framework for implementing the beta version of same-day settlement on an optional basis, in addition to the T+1 settlement cycle.