SEBI’s T+0 Settlement Cycle For 500 Stocks - All You Need To Know

The Securities and Exchange Board of India (SEBI) has announced the introduction of an optional T+0 rolling settlement cycle for the equity cash markets, aimed at enhancing market liquidity and improving trade settlement efficiency. The new system will initially apply to the top 500 stocks in terms of market capitalization, as of December 31, 2024.

T+0 Settlement Cycle: Instant Trade Settlement

The T+0 settlement cycle allows investors to settle transactions on the same day. Under this system, the shares are credited to the investor’s account and the funds are transferred in a sell transaction on the very day the trade occurs. This contrasts with the existing T+1 settlement cycle, where the settlement occurs the following day.

Participation and Differential Brokerage Charges

SEBI's circular states that all stock brokers will be permitted to participate in the optional T+0 settlement cycle. Additionally, brokers will have the flexibility to charge differential brokerage fees for T+0 and T+1 settlement cycles, within the prescribed regulatory limits.

Block Deal Window Under T+0

To further streamline the process, SEBI has outlined a new block deal window for the T+0 settlement cycle. This window will be available for a specific 15-minute session from 8:45 am to 9:00 am, in addition to the existing windows for T+1 settlement (8:45 am to 9:00 am and 2:05 pm to 2:20 pm). Trades executed in the T+0 block window will be settled on the same day, ensuring faster transaction processing.

Operational Guidelines

To ensure smooth implementation, SEBI has directed Market Infrastructure Institutions (MIIs) to publish operational guidelines that cover trading, clearing, settlement, and risk management procedures for the T+0 settlement cycle. These guidelines, along with a list of eligible scrips and qualified stock brokers (QSBs), will be available on the websites of the respective exchanges.