Thursday, May 23, 2024

T+0 settlement cycle | 'These' 25 stocks will start T+0 settlement from March 28, BSE lists | leader

Leaders Online Desk: T+0 trade settlement system is going to start in Indian stock market from 28 March. For this, on Wednesday (27th), BSE announced the list of 25 eligible stocks. In which T+0 settlement will start. It includes shares of Ambuja Cement, Ashok Leyland, Bajaj Auto, Bank of Baroda, BPCL, Cipla and Tata Group. Earlier this month, market regulator Sebi had laid out a framework to introduce a beta version of the T+0 trade settlement cycle on an optional basis.

Currently, all the shares in the Indian stock market are traded on a T+1 settlement cycle. This means that the purchase and sale transactions of shares are reflected in the demat accounts of the investors after one day. Whereas T+0 means same day settlement and instant settlement ensures that transactions are settled immediately. That is, as soon as the shares are sold, the money will be deposited in the account immediately. (Stock Market T+0 Settlement)

Initially, this option will be available for 25 shares and limited number of brokers. This option will work in addition to the existing T+1 settlement cycle in the equity cash market.

Sebi said a shorter settlement cycle would bring efficiencies in cost and time as well as transparency in investor charges and strengthen risk management in the clearing corporation and the overall securities market ecosystem. One of the major benefits of implementing an instant settlement system is to increase liquidity in the market. It will also strengthen investor protection as funds will be deposited directly into customer accounts.

T+0 means same day settlement. The settlement cycle was brought down from T+5 to T+3 in 2002 and then to T+2 in 2003. Further in 2021 T+1 settlement was introduced in a phased manner. Which was fully implemented from January 2023.

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