Capital markets regulator SEBI has extended the deadline to implement alternative T+0 rolling settlement in the equity cash market. The reason for this is to give more time to prepare the necessary systems and processes. This relief has been given to Qualified Stock Brokers (QSBs), who were facing difficulties in technical preparations. The new date will be announced by SEBI later, so that brokers get enough time to prepare.
QSBs get more relief
This decision of SEBI was taken after feedback received from QSBs. He had told that it is difficult to completely prepare the system by the deadline of November 1, 2025. It is noteworthy that this date had already been extended from May 1, 2025.
SEBI said in its circular, ‘In view of the challenges pointed out by QSBs and the need to smoothly implement the alternative T+0 settlement, it has been decided to extend the deadline for putting in place the necessary systems and processes.’
What is T+0 settlement?
T+0 settlement means that a share deal is settled on the same day the trade takes place. That means the investor gets the money or shares immediately. This increases liquidity, as funds or shares become available on the same day. Additionally, it reduces the risk of default and the entire trade-settlement process becomes faster.
T+1 settlement now
Currently T+1 settlement is applicable in the stock market. This means that the purchase and sale of a share is settled on the next day of the trade. That is, if you have bought a share today, then its money and shares come to your account on the next business day.
Earlier, T+2 cycle was applicable in Indian markets, in which settlement took place after two days. Implementation of T+1 system increased market liquidity, reduced risk and made the process of getting money or shares faster for investors.
Old rules will remain in force
SEBI has made it clear that all the rules of the circular issued on December 10, 2024 will remain applicable as before. In that circular, it was decided that the existing T+1 settlement cycle would continue, meaning most share trades would be settled on the next trading day.
Also, SEBI had also introduced the option of T+0 settlement i.e. same day settlement for some select trades, so that investors can get money or shares on the same day if they wish. Now the new deadline has been extended only for this optional T+0 cycle, while all other old rules will remain applicable as before.