After T+1, Sebi eyes share settlements within just an hour

Sebi chairperson Madhabi Puri Buch. (Mint)
Sebi chairperson Madhabi Puri Buch. (Mint)


The implementation of the new settlement window is likely by March 2024, said a person in the know

The Securities and Exchange Board of India (Sebi) is working on accelerating the settlement of shares to one hour from the existing (T+1) settlement window, chairperson Madhabi Puri Buch said on Tuesday.

“India is the first jurisdiction in the world that has moved to T+1 (trade plus one day) settlement period. Now, we are talking about one-hour settlement which will be a stepping stone to instantaneous settlement.

“It will be within a reasonably short period of time, something that is traditional, morphed into something which is very modern and contemporary," the Sebi chief said during her address at the Global Fintech Summit in Mumbai. The implementation of the new settlement window, however, is likely by March 2024, said a person in the know seeking anonymity.

While speaking on the role of artificial intelligence (AI), Buch said she believes it will provide huge opportunity for fintech firms to build products and services, which in turn will be an opportunity for the markets regulator to improve its regulatory arsenal, she said.

Besides, Sebi is increasingly focusing on disclosure-based regulations, she added.

“In the way AI is evolving, we believe that whether its disclosures made by listed companies, mutual funds, portfolio management services, investment managers, if artificial intelligence is applied to them, it could become a tool for giving very high-quality input and advice to possibly every citizen of the country at a very granular level," Buch said.

She said an arrangement is in the pipeline that if a broker goes down, every client will be able to have direct access to the exchange to manage their positions for reducing risks and close their positions.

Buch said this was a ‘non-traditional’ approach to cybersecurity, which is inclusive and is a community-led approach.

In September 2022, Buch had proposed to put in place an Application Supported By Blocked Amount (ASBA)-like secondary market facility for investors, which will be available by January 2024, said another person aware of the development.

Essentially, the ASBA process is used in applying for initial public offerings.

Under ASBA, the fund, though blocked, remains in the investors’ account, earning interest.

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