SEBI Aims for Same-Day Trade Settlement by March 2024

SEBI Aims for Same-Day Trade Settlement by March 2024

VoM News Desk | November 27, 2023 | 12:31 PM IST | Breaking News | Tags: Financial Regulation, Indian Stock Market, Madhabi Puri Buch, Offshore Investors, SEBI, Stock Market Efficiency, Trade Settlement | Follow on Google News

SEBI Aims for Same-Day Trade Settlement by March 2024

SEBI Aims for Same-Day Trade Settlement by March 2024

The Securities and Exchange Board of India (SEBI) is actively developing a plan to implement the same-day settlement of trades by March 2024. SEBI chief Madhabi Puri Buch, speaking after a recent SEBI Board meeting in Mumbai, outlined the organization’s commitment to improving settlement efficiency. This initiative will be followed by an optional system for instantaneous settlement, offering more flexibility and speed in trade resolutions.

Transition from T+0 to Instant Settlement

Buch emphasized the importance of skipping interim steps like a one-hour delay in settlement and moving directly to instantaneous settlement after T+0. She explained that the roadmap is almost complete and will introduce a parallel, optional system for immediate settlement. According to Buch, the first phase, implementing a T+0 settlement system, is expected to be in place by the end of March 2024, with the shift to instantaneous settlement planned for the following year.

Concerns from Offshore Investors and Delisting Regulations

SEBI’s proposal for same-day settlement has met with some resistance from offshore investors who are concerned about the potential for system fragmentation and increased trading costs. These investors highlighted the challenge of executing and settling trades within the same day, particularly regarding the conversion of funds into Indian rupees. Unlike the T+1 and T+2 systems where rupees can be acquired on the day of settlement, a same-day settlement requires prior day conversion. Additionally, SEBI, during its recent meeting, decided not to approve new delisting regulations due to insufficient data availability.

VoM News Desk

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