As many as 25 scrips will be available for 'T+0' or same-day trade settlement with effect from Thursday, March 28, 2024, according to an official notification released by BSE on Wednesday.
The list includes Bajaj Auto, Hindalco Industries, JSW Steel, LTIMindtree, MRF, State Bank of India, Vedanta, Ambuja Cement, Ashok Leyland, Bank of Baroda, BPCL, Birlasoft, Cipla, Coforge, Divi's Laboratories, Indian Hotels, LIC Housing Finance, Nestle India, NMDC, ONGC, Petronet LNG, Samvardhana Motherson International, Tata Communications, Trent, Union Bank of India, that will be a part of the beta version of the settlement cycle.
The development comes days after the Securities and Exchange Board of India announced the introduction of the beta version of the 'T+0' rolling settlement cycle.
SEBI will review the progress at the end of three months and six months, and decide on the next course of action.
The T+0 settlement will run parallel to the existing T+1 settlement cycle.
"Through this initiative, we believe our settlement systems will be on par with and even surpass those of many developed nations," said Samir Shah, Head – Online Business at Axis Securities.
"This development will increase liquidity for investors, allowing them to quickly enter into other trades without losing out on investment opportunities due to waiting periods. Additionally, the new system will reduce counterparty default risks," Shah added.
Speaking on the sidelines of an Association of Mutual Funds in India (AMFI) event this month, Sebi chairperson Madhabi Puri Buch said the market regulator's move to faster settlements is on account of the rise of alternates like cryptocurrency.
"We want to ensure our regulated market is competitive and offers the same advantages to investors," she said.
Following this, the market regulator will take one year to move to instant settlement by March next year.
According to SEBI, T+0 and the instant settlement cycle will bring advantages like instant receipt of funds and securities to the investor. Also, it will eliminate the risk of any kind of settlement shortage and give greater control over funds and securities to the investor.
In the current T+1 system, sellers can only access 80% of their funds on the sell day while waiting until the next day to receive the remaining 20%. However, with the new T+0 settlement system, sellers will have access to 100% of their funds on the same day of trade.
India's transition to 'T+1' from 'T+2' settlement happened in three phases, with the last one in March 2023. This is because moving into a shorter settlement cycle required changes to the infrastructure of trading operations for brokers, and also getting necessary approvals and procedural completions for foreign institutional investors who are trading from different countries in different time zones.
Once implemented across the board, India will be only the second country after China to introduce shorter trade settlements.
First Published: Mar 27, 2024 1:46 PM IST
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