Revolutionizing the Market: Sebi Chief Announces Plans for T+0 and Instantaneous Settlement

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Apurva Dhamankar

12/17/20232 min read

It is said the easier a work is completed; it attracts more of Eagerness to do the same. SEBI has implemented something of that sort where there was so much of a wait for the investors to withdraw their investment and wait for T+3 which means the day of the transaction of selling of the securities with addition to 3 working days to settle the transaction. Settlement is a two-way process that involves the transfer of funds and securities settlement on the same date. With lag being there, it has been a trend to increase Investor participation in the market by increasing the liquidity and ensuring the investors get their money the same day on which they sell or make any transaction in the markets!

Yes, you read it right! SEBI (Securities Exchange Board of India) has come up with a consideration that by the March end 2024, they will Be seeing the scenario being developed like investors' interest. T+0 indicates that there is a cooling off period or any kind of extra days to process the transaction to reach the Investor demat account. With the upgraded technology the transaction which would be done after March 2024 under T+0 Segment, it will also see transactions being completed within an hour and soon an instanton one coming into the picture. It will be a historic achievement for India as it will be the Country After China to operate on a short settlement cycle of one day while other major economies' trade is completed within two days.

Instant settlements will reduce counterparty risk that investors face in case of delay or default Counterparty risk is a kind of risk where one party fails to fulfill its obligation to another. So, Elimination or reduction of the same is possible.

India is taking technology to another level to upgrade the economy by introducing various facilities that attract more investors to come up and put their money into the markets instead of saving them and restricting the circular flow of Income in the economy by Injecting the economy with Schemes in favor of Investors and business firms. The Country is looking at Being the Biggest economy in the world! It will be exciting to see how these small steps by the Government will play a role in shaping India as not only a Great but an Independent one whose agenda is clear to achieve the biggest economy.

Thank you.

Regards,

Vansh Chaturvedi,

Kautilya, IBS Mumbai.

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