BSE, NSE set to introduce T+0 trade settlement cycle from Thursday

New Delhi: Stock exchanges BSE and NSE are all set to introduce the beta version of the T+0 or same-day trade settlement, on an optional basis, for select stocks from Thursday.

This will be in addition to the existing T+1 settlement cycle in the equity cash market.

To begin with, the option of T+0 trade settlement will be available for a limited set of 25 scrips and with a limited number of brokers.

T+0 means settlements on the same day and the move 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 transition towards T+0 not only enhances the efficiency and flexibility of market operations but also stands to substantially mitigate transactional risks, offering an immediate and tangible value to both traders and investors alike.

"Launching on March 28, 2024, for a limited trading window, this initiative marks a critical step in aligning India's trading infrastructure with global standards, paving the way for a stronger, risk-averse, and dynamic market ecosystem," Vamsi Krishna, CEO of StoxBox, said.

In a circular on Thursday, BSE came out with the list of 25 scrips wherein the option of T+0 settlement cycle would be available. The scrips included Bajaj Auto, Vedanta, Hindalco Industries, State Bank of India (SBI), Trent, Tata Communications, Nestle India, Cipla, MRF, JSW Steel, BPCL, ONGC, NMDC and Ambuja Cements.

After deliberations and approval of the Sebi's board, the regulator last week put in place a framework for introduction of the Beta version of T+0 settlement cycle on an optional basis from March 28.

Sebi, in its effort to keep pace with the changing times and carry out its mandate of development of securities markets and investor protection, shortened the settlement cycle to T+3 from T+5 in 2002 and subsequently to T+2 in 2003.

Under the new framework, all investors will be eligible to participate in the T+0 settlement cycle, if they are able to meet the timelines, process and risk requirements as prescribed by the market infrastructure institutions. Further, trade timing will be between 9.15 am and 1.30 pm.

The surveillance measures as applicable in T+1 settlement cycle will be applicable to scrips in T+0 settlement cycle. 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.