The Securities and Exchange Board of India's (SEBI's) sources on Tuesday revealed plans to overhaul the settlement process in the Indian stock market, aimed at significantly reducing the time taken for trade settlements. As per the sources, SEBI is gearing up to implement an one-hour settlement of trades. This move, scheduled to come into effect by March 2024, is expected to expedite the settlement process, allowing investors to access their funds and securities within a mere one-hour timeframe after the trade execution.
SEBI is not stopping at one-hour settlements. The regulatory authority is also working towards achieving instantaneous settlement of trades, aiming for implementation by October 2024, sources informed CNBC-TV18.
If successful, this would mark a significant leap in efficiency and transparency within the Indian stock market, offering traders and investors real-time access to their assets.
In addition to expediting primary market transactions, SEBI is also looking to streamline secondary market operations. Sources suggest that SEBI is planning to implement an ASBA (Application Supported by Blocked Amount) model for the secondary market, similar to the process used in IPOs. This change is expected to be rolled out as early as January 2024, making secondary market investments more secure and efficient.
These proposed changes signify a major shift in the Indian stock market landscape, with an emphasis on reducing settlement times and enhancing investor convenience.
Investors must, however, note that these plans are based on information from SEBI sources and are subject to regulatory approvals and market readiness. Investors and market participants should stay tuned for official announcements and guidelines from SEBI as these changes progress towards implementation.
First Published: Sept 5, 2023 4:03 PM IST
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