T+0 settlement starts, know what will be the benefit
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Share Market: In the Indian stock market, beta version of T+0 i.e. same day trade settlement has been started on BSE and NSE. Currently this facility is available on some selected shares. In the T+0 system, the shares are settled on the same day they are traded. This means that on the day of the deal the shares will be transferred to the buyer’s account and the amount will reach the seller’s account. Initially, it will offer investors the option to transact in 25 securities at settlement. More than 60-60 members participated in both the stock exchanges on the first day. Designed for same-day settlement of trades, the T+0 settlement system facilitates faster credit of funds and securities into investors’ accounts. This reduces the risk associated with the time taken to settle a trade.
T+0 will reduce the risk
Sundararaman Ramamurthy, Managing Director and Chief Executive Officer (CEO), BSE, said that we are pleased to announce the successful implementation of the first T+0 settlement cycle today. This is an important step towards increasing efficiency and reducing risk in our market. We are confident that this alternative settlement mechanism will contribute to the continued growth and development of the capital markets in India. Bajaj Auto, Vedanta, Hindalco Industries, State Bank of India (SBI), Trent, Tata Communications, Nestle India, Cipla, MRF, JSW Steel, BPCL, ONGC, NMDC and Ambuja Cements are among the 25 stocks available for T+0 settlement. .
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T+2 started in the year 2003
SEBI, after extensive deliberations and approval from the Board of Directors, last week introduced a framework for introduction of the beta version of the T+0 settlement mechanism on an optional basis from March 28. In an effort to keep pace with the changing times and fulfill its responsibility of development of securities markets and investor protection, the Securities and Exchange Board of India (SEBI) reduced the settlement cycle from T+5 to T+3 in 2002 and thereafter Did T+2 in 2003.
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