The Securities and Exchange Board of India (SEBI) is making significant strides in the evolution of trade settlements in the Indian stock market. The regulator has announced plans to implement a one-hour trade settlement by March 2024 and aims to introduce instantaneous settlement by October 2024. This marks a progressive shift from the current T+1 settlement cycle, where trades are settled one day after the transaction.
Key Developments in Trade Settlements
- Transition to T+1 Settlement:
- One-Hour Settlement by March 2024:
- Instantaneous Settlement by October 2024:
- Impact on Market Participants:
- Potential Benefits:
Conclusion
The move towards faster settlement cycles by SEBI is a landmark decision in the Indian financial markets, expected to enhance market efficiency, reduce risks, and provide greater flexibility to market participants. The implementation of one-hour and instantaneous settlements will position India at the forefront of global best practices in stock market operations. This change not only reflects SEBI’s commitment to leveraging technology for market advancements but also indicates a significant shift towards more investor-friendly practices in the Indian stock market.