Stock exchanges are soon to be shifting from T+1 to T+0 settlements, and SEBI will be monitoring their progress.
T+0 Settlement
Exchanges will be introducing the beta version of ‘T+0’ or same-day trade settlements in a handful of stocks in the cash segment starting Thursday. This change will be introduced for a selected group of 25 stocks and will only involve a limited number of brokers. This cautious approach will allow regulators to monitor the transition closely and analyze its impact.
CEO of StoxBox, Vamsi Krishna, believes that this shift will improve efficiency as well as flexibility in market operations and will also reduce the risks involved in transactions. Regulators will review the progress of this new settlement cycle after six months and decide on any further actions or adjustments.
Experts On T+0 Settlement
Most of the rules and fees that were applied to settling trades in the T+1 settlement will also be used in the T+0 settlement. The system still needs some work to handle same-day settlements smoothly, and that will be achieved slowly as we progress with this. Experts believe introducing same-day settlements can make the stock market very unpredictable.
Moving to same-day settlements is a big deal, but some challenges have to be faced before it works smoothly.
Rakesh Mehta, Chairman of Mehta Group, says that making this change will completely change the stock market behind the scenes. “T+0” would involve updating all the technology, rules, and processes, which itself is a task, and all of these can be very complicated and expensive.
The COO of Trajedani, Trivesh D, believes to that improve sameday settlements, specific things have to be done, like making sure margin reporting is done consistently, having clear guidelines for settling trades, and protecting against unfair price differences.
List of 25 stocks that are available for T+0 trade settlement
- Ambuja Cements Ltd.
- Ashok Leyland Ltd.
- Bajaj Auto Ltd.
- Bank of Baroda
- Bharat Petroleum Corporation Ltd.
- Birlasoft Ltd.
- Cipla Ltd.
- Coforge Ltd.
- Divis Laboratories Ltd.
- Hindalco Industries Ltd.
- Indian Hotels Co. Ltd.
- JSW Steel Ltd.
- LIC Housing Finance Ltd.
- LTI Mindtree Ltd.
- MRF Ltd.
- Nestle India Ltd.
- NMDC Ltd.
- Oil and Natural Gas Corporation
- Petronet LNG Ltd.
- Samvardhana Motherson International Ltd.
- State Bank of India
- Tata Communications Ltd.
- Trent Ltd.
- Union Bank of India
- Vedanta Ltd.
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