Stock Markets: In compliance with the guidelines issued by the Securities and Exchange Board of India (SEBI), the Bombay Stock Exchange (BSE) has announced plans to launch a beta version of the T+0 settlement system. The BSE revealed in a notice issued on Friday that the beta version of the T+0 settlement will be implemented on March 28, 2024, which falls on Thursday next week. Additionally, the BSE stated that following the introduction of the beta version of the T+0 settlement, all charges and fees applicable to T+1 settled securities, including Transaction Charges, STT, and Regulatory/Turnover Fees, will also apply to T+0 settled securities.
T+0 settlement date
“The BSE notice stated that Trading Members should refer to SEBI Circular no. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/20 dated March 21, 2024, regarding the Introduction of the Beta version of T+0 rolling settlement cycle on an optional basis in addition to the existing T+1 settlement cycle in Equity Cash Markets. In accordance with this circular, the Exchange will commence trading in securities under the T+0 settlement mechanism starting from Thursday, March 28, 2024. However, it was clarified that T+0 prices would not be considered in the Index calculation. The T+0 cycle refers to settlement on the same date.”
Framework for T+0 settlement
The BSE has outlined the trading parameters for the beta version of the T+0 settlement as follows:
1] Scrip ID/ Symbol: The Scrip ID remains the same as the corresponding T+1 security, suffixed with “#” (e.g., HINDMOTORS#).
2] Group: Maintained the same as the corresponding T+1 security.
3] Tick Size: Remains unchanged from the corresponding T+1 security.
4] Market Lot: Remains the same as the corresponding T+1 security.
5] Order Type: End of Day/Session, Immediate or Cancel (IOC), Market & Limit Order are accepted.
6] Order matching: Utilizes an anonymous order book with continuous matching, following Price – Time priority.
7] Price Band: Set at +/- 1% (100 Basis points) based on the Close Price of corresponding T+1 settled security, with recalibration throughout trading hours after a +/- 0.5% (50 basis points) movement in the Last Traded Price (LTP) of the corresponding T+1 settled security in the normal market.
8] Eligible Members: All members eligible to trade in the Equity segment are permitted.
9] Market Timings: Trading is allowed from 09:15 hrs to 13.30 hrs.
10] Client code modification window: Open until 13:45 Hrs.
11] Eligible Client Type: All types of clients are eligible, except those settling through custodians.
12] Trading Sessions:
a) One Continuous session from 09:15 hrs to 13.30 hrs.
b) No Pre-open/special pre-open/block/auction/post-close session.
c) Trading in T+0 scrips is unavailable during the settlement holiday.
d) No Trading on the Ex-date of any corporate action in the corresponding T+1 settled security (including scheme of arrangement).
e) Trading in T+0 scrips is unavailable during the Index rebalancing day of corresponding T+1 Security.
What SEBI guidelines say
On Thursday, the Securities and Exchange Board of India (SEBI) released guidelines for the beta version of the T+0 settlement, stating, “Following discussions and approval by the Board, a framework has been established for the introduction of the Beta version of the T+0 settlement cycle on an optional basis alongside the existing T+1 settlement cycle in the equity cash market, focusing on a select group of 25 scrips and involving a limited number of brokers.”
SEBI further emphasized that the shortened settlement cycle aims to enhance cost and time efficiency, increase transparency in charges for investors, and bolster risk management at clearing corporations and across the broader securities market ecosystem.