BSE, NSE To Roll Out T+0 Trade Settlement Cycle This Thursday

BSE issued a circular revealing the list of 25 stocks eligible for the T+0 settlement cycle option

The Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) are preparing to launch the beta version of T+0, or same-day trade settlement, on an optional basis for select stocks starting Thursday. This addition will complement the existing T+1 settlement cycle in the equity cash market. Initially, the T+0 trade settlement option will be restricted to a specific set of 25 stocks and a limited number of brokerage firms. T+0 settlement denotes transactions settled on the same day, aiming to enhance cost and time efficiency, transparency in charges for investors, and bolster risk management within clearing corporations and the broader securities market ecosystem.

"The transition towards T+0 not only enhances the efficiency and flexibility of market operations but also stands to substantially mitigate transactional risks, offering an immediate and tangible value to both traders and investors alike. Launching on March 28, 2024, for a limited trading window, this initiative marks a critical step in aligning India's trading infrastructure with global standards, paving the way for a stronger, risk-averse, and dynamic market ecosystem," said Vamsi Krishna, CEO of StoxBox.

BSE issued a circular revealing the list of 25 stocks eligible for the T+0 settlement cycle option. The listed scrips comprise companies such as Bajaj Auto, Vedanta, Hindalco Industries, State Bank of India (SBI), Trent, Tata Communications, Nestle India, Cipla, MRF, JSW Steel, BPCL, ONGC, NMDC, and Ambuja Cements.

Following deliberations and approval by the Securities and Exchange Board of India’s (SEBI) board, the regulatory body implemented a framework last week for the introduction of the Beta version of the T+0 settlement cycle on an optional basis starting from March 28. In line with its commitment to adapt to evolving market dynamics and fulfill its mission of fostering securities market development and ensuring investor protection, SEBI had previously reduced the settlement cycle from T+5 to T+3 in 2002, and subsequently to T+2 in 2003.

According to the new framework, all investors can engage in the T+0 settlement cycle provided they adhere to the specified timelines, procedures, and risk standards set by market infrastructure institutions. In addition, trading will be restricted to the period between 9:15 am and 1:30 pm.

Surveillance measures applicable to the T+1 settlement cycle will also apply to stocks in the T+0 settlement cycle. Prices from T+0 transactions will not be factored into index calculations or settlement price determinations. Additionally, securities traded in the T+0 segment will not have a separate closing price.