The Securities and Exchange Board of India (Sebi) has announced the implementation of a framework to introduce the beta version of the T+0 trade settlement cycle, on an optional basis, as of Thursday.

Initially, this option will be limited to a select set of 25 stocks and a specific number of brokers. This alternative settlement cycle will coexist with the existing T+1 settlement cycle in the equity cash market. According to a circular issued by Sebi, the new framework will take effect from March 28.

Sebi stated, “Following discussions and approval by the Board, it has been decided to establish a framework for the introduction of the Beta version of the T+0 settlement cycle, on an optional basis, alongside the existing T+1 settlement cycle in the equity cash market, for a restricted set of 25 stocks and a limited number of brokers.”

The regulator emphasized that a shortened settlement cycle will enhance cost and time efficiency, increase transparency in investor charges, and bolster risk management at clearing corporations and within the broader securities market ecosystem. T+0 settlement signifies transactions settled on the same day.

In its commitment to adapt to evolving market dynamics and fulfill its mandate of fostering the development of securities markets and ensuring investor protection, Sebi previously shortened the settlement cycle to T+3 from T+5 in 2002, followed by a further reduction to T+2 in 2003.

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