SEBI pitches phased rollout of same-day settlement plan, seeks public input

The Securities and Exchange Board of India (SEBI), the country's market regulator, has unveiled a comprehensive plan for the gradual implementation of an optional same-day settlement system, marked as T+0 in financial circles. Before finalising the rules, SEBI has opened the proposal for public feedback.

In the initial phase of the proposed plan, securities trading until 1:30 p.m. IST will undergo settlement by 4:30 p.m., according to the consultation paper released by SEBI on Friday. The plan envisions a phased approach to expedite settlement processes.

Moving into the second phase, the plan suggests immediate trade-by-trade settlement for the entire trading day, extending until 3:30 p.m. This ambitious initiative aims to streamline and enhance settlement efficiency in the Indian securities market.

SEBI is also considering offering same-day settlement exclusively for the top 500 listed shares by market capitalisation. This strategic move is intended to focus on high-impact stocks and further catalyse liquidity in the market.

While the plan is designed to be inclusive, SEBI specified that, during the first phase, clients settling transactions through custodians would be excluded. The regulator emphasised that this exclusion is a temporary measure during the initial rollout.

Though SEBI did not provide a specific timeline for the implementation of the plan, regulatory officials have previously indicated that the plan could be operational before the conclusion of the current fiscal year in March. Additionally, there are anticipations that India may transition to instantaneous settlement within a year of the plan's initiation.

The proposal marks a significant step toward modernising and aligning India's securities settlement practices with global standards. SEBI's openness to public input underscores its commitment to fostering a transparent and efficient financial ecosystem.

(With Reuters inputs.)