The Securities and Exchange Board of India (Sebi) has extended the implementation timeline for the optional T+0 (T plus 0) settlement cycle for qualified stock brokers (QSBs) in equity cash markets to November 1.
In the T+0 settlement cycle, trades are settled on the same day they are executed. This means funds and securities are transferred between buyers and sellers on the same day, unlike the traditional T+1 (next day) settlement cycle.
In a circular on Tuesday, Sebi said the decision was based on the feedback from QSBs and subsequent discussions with stock exchanges, clearing corporations, depositories, and QSBs. The extension aimed to ensure a smoother implementation process.
The deadline for QSBs to put in place the necessary systems and processes for enabling seamless participation of investors in the optional T+0 settlement cycle was May 1.
Many top qualified stock brokers had urged Sebi to extend the deadline as they wee operationally unprepared for such a cycle. Currently, very few brokers offer this option to clients as their risk management and order management systems cannot handle the scale for a same-day settlement.
India became the first country to implement a T+1 settlement cycle for all listed stocks on January 27, 2023. A year later, on March 28, 2024, Sebi introduced the optional T+0 settlement.
While initially applicable to just 25 scrips, Sebi announced on December 10 that the optional T+0 settlement would be extended to the top 500 stocks from January 31, 2025. It would start with scrips at the bottom 100 companies and gradually include the next 100 companies every month until the top 500 companies are available for trading in the optional T+0 settlement cycle. Currently, investors can trade in stocks of over 5,600 companies.
Sebi also clarified that entities meeting the QSB criteria—based on minimum active clients and other parameters—must implement the necessary systems and processes to enable seamless investor participation in the optional T+0 cycle.
Sebi has also directed stock exchanges to implement a new “Block Deal window" exclusively for the morning session from 8:45 am to 9 am and the existing windows from 8:45–9:00 am and 2:05–2:20 pm for T+1 settlements. “The trades in the optional T+0 block window session will be settled on the T+0 settlement cycle," Sebi said.
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