Yesterday, SEBI announced that the same-day settlement cycle would be launched on March 28 for testing. This beta version will include only 25 stocks and is optional for brokers to participate. SEBI has rolled out this testing phase to ensure that the new settlement cycle is glitch-free and works smoothly after its launch for the public.
Currently, we follow the T+1 settlement cycle, which means that stocks, bonds, and exchange-traded funds (ETFs) are settled a day after the trade.
Key Points Of The Announcement
- The new settlement cycle, T+0, will work alongside the existing T+1 settlement cycle in the equity markets. However, it will include just 25 stocks, and only a selected broker will be able to participate in it.
- The trading session for the new settlement cycle will continue from 9:15 a.m. to 1:30 p.m.
- As per SEBI, only those investors will be allowed to participate in T+0, who can match the trading session’s duration and meet the exchange’s risk requirements.
Also, learn more about Employee Stock Ownership Plan.
- SEBI, in its recent circular, mentioned, “The price in the T+0 segment will operate with a price band of +100 basis points (1 percentage point) from the price in the regular T+1 market. This band will be re-calibrated after every 50 basis point movement in the underlying T+1 market.”
- The regulator further added, “T+0 prices, will not be considered in index calculation and settlement price computation. Besides, there would be no separate closing price for securities based on trading in the T+0 segment, as per The Economic Times.
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