Wednesday, April 17, 2024

T+0 Settlement | What is 'T Plus Zero'?; How will investors benefit? | leader

Vanita Cotton

The number of people trading in the stock market is also increasing. In this, the number of people trading in index trading, commodity trading, shares trading, commodity trading has increased post-Covid. Market regulator SEBI has recently given a good news for this category of traders. Accordingly, the T+0 settlement process has started in the Indian stock market for limited shares from March 28. Although it is currently on an experimental basis, it is considered a historic step. (T+0 Settlement)

Last year, SEBI started T+1 process. Therefore, after selling the shares, the period that the investors had to wait for two days for the relevant amount to reach the demat account has been reduced to one day. That is, if an investor sells a share today, the money gets deposited in his demat account the very next day. India became the second country in the world after China to implement T+1 settlement.

T+2 settlement is still being implemented in Europe, America and Japan. Now under T-0 settlement this process is going to be more speedy, so after selling the shares there is no need to wait even a day to get the money. The money will be credited to his account immediately on the day the shares are sold. If investors buy or sell shares till 1.30 pm on the trading day, their settlement will be done till 4.30 pm. That means the money will be credited to their account within that time. This settlement arrangement will be available on a voluntary basis. As this is now being introduced as an option, the T-1 settlement will continue for now. (T+0 Settlement)

Sebi says that T+0 settlement will increase the number of investors in the stock market. This is because currently small investors usually stay away from the market as their money does not reach them on the same day. Now investors' money will not be stuck with the brokers for even a day, this will obviously reduce the risk. It will increase the confidence of retail investors. Sebi says that once the T+0 system is fully implemented, the number of demats will grow even faster.

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