News Brief
India Implements 'Beta Version' Of T+0 Settlement System In Stock Market: All About It
BSE Building in Mumbai. (Wikimedia Commons)
India's stock market is all set to adopt the T+0 settlement system, joining a select group of countries embracing shorter trade settlement cycles.
The move comes as part of efforts to enhance market efficiency and liquidity.
The T+0 settlement system, where trades in shares are settled on the same day as the trade (T), eliminates the delay of the previous T+1 cycle.
This means that shares will be transferred to the buyer's account and funds deposited in the seller's account promptly, streamlining the transaction process.
To ensure a seamless transition, exchanges will introduce a 'beta version' of the shorter settlement cycle on an optional basis alongside the existing T+1 cycle.
Under this pilot project, a limited number of brokers will offer same-day settlement for 25 selected stocks during a designated trading session from 9:15 AM to 1:30 PM.
The implementation of the T+0 system aims to enhance market dynamism and liquidity.
India's stock trade settlement cycle has undergone significant evolution over the years.
From the T+5 settlement cycle, the country transitioned to T+3 in 2002 and further reduced it to T+2 in 2003.
The introduction of the T+1 system in 2021 was later normalized in 2023.
Globally, most markets adhere to the T+2 settlement system, with the US slated to transition to T+1 in May.
Notably, China already operates on a T+0 settlement system.
