In a transformative move for India’s stock market, SEBI (Securities and Exchange Board of India), the capital market regulator, is preparing to introduce a game-changing concept known as T plus zero (T+0) settlement trade. This revolutionary step, expected by March-end 2024, means trades will settle on the same day they’re executed.

SEBI’s Chairperson, Madhabi Puri Buch, announced this significant shift towards a more efficient trading system. The journey towards this goal began with a reduction in settlement timelines, moving from the T+2 system (where trades settled two days post-execution) to T+1 earlier in January 2023. Now, the aim is to progress directly from T+1 to instantaneous settlements, bypassing T+0.

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What does T+0 settlement mean for retail traders?

For retail traders, this evolution is monumental. Currently, the T+1 system settles trades the next business day, but with T+0, it’ll become even quicker. This means retail traders can access their securities and funds faster, significantly enhancing liquidity and enabling them to respond more agilely to market movements.

SEBI’s pursuit of T+0, and eventually instantaneous settlements, reflects its commitment to making India’s capital markets more dynamic and investor-friendly. This shift will likely attract more participation, given the quicker turnaround times and reduced waiting periods for fund and security transfers.

Moreover, this initiative stands as a testament to the robustness of India’s trading infrastructure, capable of handling such rapid processes smoothly. SEBI’s progressive approach is paving the way for a stock market that aligns with global standards of efficiency and speed, benefitting retail traders and the market ecosystem at large.

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