The Securities and Exchange Board of India (SEBI) is gearing up to expedite share settlements to just one hour, a significant leap from the current T+1 (trade plus one day) window.
SEBI’s chairperson, Madhabi Puri Buch, highlighted this during her speech at the Global Fintech Summit in Mumbai. “From traditional to ultra-modern, we’re evolving our settlement systems,” she remarked. Insiders hint at a probable rollout by March 2024.
More applications for AI: Buch also emphasised the transformative role of artificial intelligence (AI) in the fintech sector. She envisions AI-powered tools offering high-quality financial advice to every Indian, enhancing transparency and efficiency. SEBI’s focus is also shifting towards more disclosure-based regulations.
A noteworthy revelation from Buch was the upcoming feature allowing direct exchange access for clients if their broker faces issues. This innovative cybersecurity measure aims to minimize risks and ensure seamless trading.
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Recalling a September 2022 proposal, Buch also mentioned the introduction of an ASBA-like facility for the secondary market by January 2024. For the uninitiated, ASBA ensures that while funds are blocked during IPO applications, they still accrue interest in the investor’s account.
What it Means For Traders and Other Stakeholders
- Boosted Liquidity: Quicker access to funds and securities will invigorate market liquidity, optimizing trading experiences.
- Enhanced Efficiency: Swift settlements will curtail errors and hold-ups, streamlining market operations.
- Augmented Transparency: Real-time transaction tracking will bolster investor trust and market clarity. In essence, this swift settlement transition heralds a brighter, more efficient era for India’s securities market, promising advantages for all stakeholders.
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