The Securities and Exchange Board of India (Sebi) is looking to introduce same-day settlement or T+0 by the end of March 2024 and follow it up with instantaneous settlement a year later.

This was disclosed by Sebi chairperson Madhabi Puri Buch at a press conference on Saturday after the board meeting of the market regulator.

Buch had proposed the instant settlement of trades in July. T+0 is the same-day settlement, while in instantaneous settlement transactions are done on a real-time
basis.

She had then said the facility would be implemented gradually, following consultations with stakeholders.

Buch on Saturday indicated that T+0 will be launched first, and there would be a pathway or a road map towards instantaneous settlement.

In the proposed T+0 regime, settlement is likely to be done in an hour.

The country fully transitioned to a T+1 settlement system for equities in January. (T denotes the date on which the trade was done).

Presently, investors buying shares will get delivery the next business day; the seller will also get the funds the next day.

The country had earlier followed the T+2 system.

``Sebi wants the T plus zero (T+0) settlement norm to be in place from March-end 2024 and T plus instantaneous settlement 12 months from thereon,” Buch said.

She pointed out that the market makers are of the view that it made better sense to move directly to T+instantaneous from T+1 as there is no benefit to be drawn from the middle ground, which is T+0.

She said Sebi is “fully open” to the suggestions made by the market makers on instantaneous settlement.

The new settlement will be parallel to the existing settlement system and will fully be optional.

It will be available on select large products, and even then there will be options. The upgrade to T+1 from T+2 has been eventless from an infrastructure point of view, she said.

Earlier, foreign portfolio investors had raised concerns about the shortening of the settlement cycles, citing forex-related worries.