Capital markets regulator SEBI (Securities and Exchange Board of India) will begin the T+0 (same day) trade cycle settlement on an optional basis by March 28, chairperson Madhabi Puri Buch said on Monday, March 11. The SEBI chairperson said that the market regulator's move to faster settlements is on account of rise of alternates like cryptocurrency.
While speaking on the sidelines of an AMFI event felicitating women fund managers in Mumbai, Buch also said that the instant settlement cycle will be done by March 2025. "We want to ensure our regulated market is competitive and offers same advantages to investors," she said.
T+0 would mean settlements in the same day and instant settlement would ensure trades are settled immediately.
At present, the settlement of funds and securities happens on the T+1 (trade plus one day) settlement cycle. This facility will be in addition to the existing T+1 cycle in the secondary markets for the equity cash segment.
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.
The settlement cycle was shortened from T+5 to T+3 in 2002 and subsequently to T+2 in 2003. Further in 2021, T+1 settlement was introduced in a phased manner, which was fully implemented from January last year.
SEBI on SME IPOs
On Monday, the SEBI chairperson also highlighted that the market regulator has noticed "signs of manipulation in the SME segment".
"We do see signs of manipulation in the SME segment. Market has given its feedback. We are working on robust evidence and feedback for action," the SEBI chairperson said.
Buch further noted that the market regulator has been monitoring price manipulation instances at the IPO, trading level with regards to some IPOs. "Looking to implement disclosures as a starting step with respect to SME IPOs," she added.
First Published: Mar 11, 2024 1:07 PM IST
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