T+0 settlement cycle

T+0 settlement cycle

News: India’s stock exchanges have launched a beta version of same-day transaction settlement, known as T+0, for select cash segment stocks.

About:
 The T+0 settlement cycle is an innovative system introduced by the Securities and Exchange Board of India (SEBI).
 Traditionally, stock market settlements followed a T+2 cycle, where trades were settled two days after the transaction.
 Under the T+0 cycle, trades are settled on the same day as the transaction occurs. This immediate settlement reduces transactional risks and enhances market efficiency by providing immediate liquidity to investors.

Eligibility and optional basis
 The T+0 settlement is currently optional and available for specific stocks.
 It applies to trades executed between 9:15 a.m. and 1:30 p.m. during market hours.
 Investors have the choice to settle trades immediately, eliminating the waiting period

Benefits
 Instant Settlement: All settlements occur on the same day, allowing traders to settle trades promptly.
 Reduced Risk: Immediate settlement minimizes exposure to market fluctuations.
 Efficiency: The system streamlines processes and ensures faster access to funds.

Implementation
 The beta version of the T+0 settlement cycle was launched on March 28, 2024. Initially, 25 scrips are eligible for same-day settlement.