The Securities and Exchange Board of India (SEBI) is working on a roadmap for the same-day settlement of trades by March 2024, followed by an optional parallel system for instantaneous settlement, SEBI chief Madhabi Puri said.
Speaking at a press conference in Mumbai following the SEBI Board meeting, Buch emphasized that both market infrastructure and brokers have underscored the necessity for a technological pathway that enables immediate settlement. She stressed the importance of avoiding a one-hour delay as an interim step and advocated for a direct transition from T+0 to instantaneous settlement.
"The progress is very good, a lot of discussion has happened. A roadmap is pretty much ready. It is a parallel system that is completely optional," Buch explained.
Further stressing on the timeline, she said, “What market participants have told us is that we will need to start at T+0 and then move to instantaneous. For T+0, it will be by the end of March, then instantaneous will be another year later."
In January of this year, India adopted a T+1 settlement system, ensuring that trades are resolved on the subsequent business day.
Previously, there were indications that the market regulator's proposal to enable same-day settlement of equity market trades was encountering resistance from offshore investors. These investors expressed concerns about the potential fragmentation of the system and the associated increase in trading costs.
For a foreign investor to execute and settle a trade within the same day, the conversion of funds into Indian rupees must occur one day prior to the trade. In the T+1 and T+2 settlement systems, rupees can be acquired on the day of settlement.
SEBI, on Saturday, also refused to approve the new delisting regulations due to the non-availability of sufficient data.
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Updated: 26 Nov 2023, 01:00 PM IST
SEBI to introduce T+0 settlement trade by March 2024 and instantaneous settlement by 2025, says chief Madhabi Puri | Mint - Mint
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