Understanding T+0 Settlement: A Game-Changer in Indian Capital Markets

The Indian capital market is set to witness a transformative shift with the introduction of the much-anticipated T+0 settlement, scheduled to go live on exchanges starting March 28. This move, initiated by the Securities and Exchange Board of India (SEBI), marks a significant milestone in the evolution of market settlement mechanisms.
T+0 Settlement refers to the process of settling trades on the same day they are executed. Under this framework, sellers of stocks will receive funds on the day of the sale itself, streamlining the settlement cycle compared to the current T+1 settlement system.
The primary advantage of T+0 settlement lies in its ability to provide investors with same-day access to funds and securities. This accelerated settlement process enhances liquidity and efficiency in the market, benefiting market participants across the board.
Market Timings and Implementation Phases:
The T+0 settlement will operate within a continuous trading session from 9:15 a.m. to 1:30 p.m. SEBI has outlined a phased implementation plan for the equity cash segment:
  • Phase 1: Introduces an optional T+0 settlement cycle for trades conducted until 1:30 p.m. Settlement of funds and securities will occur on the same day by 4:30 p.m.
  • Phase 2: Proposes an optional immediate trade-by-trade settlement. Trading hours will extend until 3:30 p.m. Upon the completion of phase 2, the optional T+0 settlement under phase 1 will cease.
Identifiers and Operational Details:
  • Identifiers: T+0 settled securities will be denoted by the series 'T0', with settlement indicated as '0' in the security master.
  • Non-Trading Days: Trading in T+0 settled securities will not occur on the ex-date of any corporate action, index rebalancing day of the corresponding T+1 settled security, or on settlement holidays.
All eligible members in the capital market segment can partake in trading T+0 settled securities. However, a separate trade report for T+0 trades cannot be downloaded. Instead, details will be available within existing reports downloaded by members.
Trades conducted under T+0 settlement are eligible for bulk reporting. Once executed under T+0, the settlement type cannot be changed, emphasizing the importance of accurate trade execution and settlement management.
The introduction of T+0 settlement signifies a major stride towards enhancing market efficiency and reducing settlement risks.



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Changes in Our Business Model
25th Sept 2020
Greetings from Moneylife Advisory Services
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
What remains the same:
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  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
What changes:
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Over the next few weeks our site and our communication to you will reflect these and other additional changes.
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
Debashis Basu