In a significant development, SEBI Chairperson Madhabi Puri Buch announced on November 25 that a roadmap has been laid out for achieving same-day settlement of trades by March 2024. Following this, an optional parallel system for instantaneous settlement is expected to be implemented.
Speaking at a press conference in Mumbai post SEBI’s Board meeting, Buch highlighted the importance of a technological path for instantaneous settlement, where the transition should not involve a one-hour delay but rather a direct move from T+0 to instantaneous.
Buch expressed satisfaction with the progress, stating, “The progress is very good, a lot of discussion has happened. A roadmap is pretty much ready. It is a parallel system that is completely optional.” She provided insights into the timeline, stating, “What market participants have told us is that we will need to start at T+0 and then move to instantaneous. For T+0, it will be by the end of March, then instantaneous will be another year later.”
It’s noteworthy that India shifted to T+1 settlement, settling trades on the next business day, in January of this year.
However, reports had earlier suggested that SEBI’s plan to enable same-day settlement faced resistance from offshore investors who were concerned it might lead to a fragmented system and increase trading costs. The process for foreign investors to convert funds into Indian rupees a day before the trade could pose challenges.
