Sebi extends deadline for implementation of T+0 settlement to 1 Nov

The Securities and Exchange Board of India (Sebi) extended the implementation timeline for the optional T+0 (T plus 0) settlement cycle for qualified stock brokers (QSBs) in equity cash markets to 1 November. 

In a circular released on Tuesday, Sebi said the decision was taken due to the feedback received from QSBs and subsequent discussions with stock exchanges, clearing corporations, depositories, and QSBs. 

The extension aims to ensure a smoother implementation process.

The deadline for QSBs to put in place the necessary systems and processes for enabling seamless participation of investors in the optional T+0 settlement cycle was 1 May. 

Operational challenges

Mint reported in April that close to 10 qualified stock brokers had requested that market regulator Sebi extend the 1 May deadline for offering a same-day settlement option to any of their clients desirous of such a cycle.

Mint was told that as most top brokers are operationally unprepared for such a cycle, Sebi could extend the deadline for the QSBs to offer their clients the option of same-day settlement. 

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Currently, very few brokers offer this option to clients as their risk management and order management systems cannot handle the scale for a same-day settlement.

To be sure, India became the first country to implement a T+1 settlement cycle for all listed stocks on 27 January 2023. A year later, on 28 March 2024, Sebi introduced the optional T+0 settlement.

While initially applicable to just 25 scrips, Sebi announced on 10 December that the optional T+0 settlement would be extended to the top 500 stocks from 31 January 2025. It would start with scrips at the bottom 100 companies and gradually include the next 100 companies every month until the top 500 companies are available for trading in the optional T+0 settlement cycle.

Currently, investors can trade in stocks of over 5,600 companies.

The regulator also clarified that entities meeting the QSB criteria—based on minimum active clients and other parameters—must implement the necessary systems and processes to enable seamless investor participation in the optional T+0 cycle.

Additionally, Sebi directed stock exchanges to implement a new “Block Deal window" exclusively for the morning session from 8:45 AM to 9:00 AM and the existing windows from 8:45–9:00 AM and 2:05–2:20 PM for T+1 settlements. “The trades in the optional T+0 block window session will be settled on the T+0 settlement cycle," Sebi clarified.

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