T+0 settlement kick starts today. Here is how it affects you


Stock exchanges are set to launch the same-day transaction settlement (or “T+0”) beta version for a select few cash segment stocks starting today ( Thursday, March 28). 

The T+0 settlement will occur concurrently with the current T+1 settlement cycle. Presently, the market is considering same-day transaction settlement within a year after fully embracing the T+1 cycle.

Sellers under the present T+1 system may only get 80% of their cash on the day of sale; the remaining 20% must be waited for the following day. Nonetheless, sellers will have instant access to 100% of their cash on the day of transaction due to the new T+0 settlement system.

Prashanth Tapse, Research Analyst, Sr VP Research of Mehta Equities, said that introducing the T+0 settlement would be of great benefit for traders and investors who are looking for immediate liquidity, allowing them to utilise funds and react to the market quickly in the highly volatile sessions. 

“I feel this could be highly beneficial to retailers who come with limited cash into the market, and this would revolutionise the trading landscape for the same small investors. Shortening of the settlement cycle means optimal utilisation of funds to make best-in-time returns to swing traders,” added Tapse. 

For a first 25 scrips and a limited set of brokers, exchanges will implement a shortened trading cycle. After evaluating the results at the three- and six-month marks, capital market regulator Securities and Exchange Board of India (SEBI) will determine the next step.

NSE T+0 settlement starting today with 25 stocks, including State Bank of India (SBI), MRF, Hindalco, and Vedanta, would be eligible for the T+0 settlement cycle. Among the others are Ambuja Cements, Ashok Leyland, Bajaj Auto, Bank of Baroda, Bharat Petroleum Corporation Ltd (BPCL), Birlasoft, Cipla, Coforge, Divi’s Laboratories, Hindalco Industries, Indian Hotels Company Ltd, JSW Steel, LIC Housing Finance, LTIMindtree, Samvardhana Motherson International, MRF, Nestle India, NMDC, Oil and Natural Gas Corporation (ONGC), Petronet LNG, SBI, Tata Communications, Trent, Union Bank of India, and Vedanta.

25 stocks will be eligible for the T+0 settlement cycle under the BSE T+0 settlement, including Ambuja Cements, Bajaj Auto, BPCL, Cipla, SBI, and Vedanta. 

The others are: LIC Housing Finance; JSW Steel; Indian Hotels; Ashok Leyland; Bajaj Auto; Bank of Baroda; Bharat Petroleum Corporation Ltd; Birlasoft; Cipla; Coforge; Divi’s Laboratories; LIC Housing Finance; LTIMindtree; MRF; Nestle India; NMDC; Oil and Natural Gas Corporation; Petronet LNG; Samvardhana Motherson International; State Bank of India; Tata Communications; Trent; Union Bank of India; and Vedanta.


(more to come)

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Published: 28 Mar 2024, 08:42 AM IST


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