SEBI's T+0 Settlement Gets Meager Response From Investors

In its soft launch phase, market watchdog, the Securities and Exchange Board of India (Sebi), found few takers for its experiment with the same-day settlement cycle, or T+0 settlement rolled out for just 25 stocks.

The T+0 mechanism, which is an optional settlement cycle that runs parallel to the standard T+1 cycle and settles trades the following day, was introduced in March.

Same-day-settlement turnover on NSE

Six out of the 25 scrips have not recorded a single trade, and the mechanism has only generated a meager Rs 5.7 lakh in turnover on the NSE. On March 28, the launch day, more than 80 per cent of the total, amounting Rs 4.63 lakh, was registered.

BSE turnover for same-day-settlement

Even less, at less than Rs 3 lakh, is the turnover for T+0 trades on the BSE.
Industry reports claim that Sebi intends to introduce an updated framework in November with the goal of broader adoption and implementation.

In addition to improving client control over their securities and facilitating quick capital release, the shortened T+0 cycle also improves risk management by clearing corporations.

At its board meeting on Thursday, the market regulator may examine the current framework as the first three-month beta rollout period draws to a close.

The majority of brokers who lead digitally or who have a higher percentage of active clients still do not provide the option. of the new settlement cycle. There had only been token trades, which resulted in lower volumes. Additionally, there are some operational issues, and there is currently no investor demand for a shorter cycle.

Sebi Chairperson Madhabi Puri Buch expounded on the advantages of a shortened settlement cycle in April. Following the switch to T+1, there has been a decrease in the defect rate of settlement, a metric used to evaluate the delivery versus payment ratio.