Stock Exchanges Roll Out Same-Day Transaction Settlement System

Stock Market new rule: Stock exchanges are poised to introduce a beta version of same-day transaction settlement, known as "T+0," for select cash segment stocks starting today, Thursday, March 28. This innovative move aims to streamline the trading process, allowing sellers to access 100% of their cash on the day of the transaction, unlike the current T+1 system where only 80% of the cash is available immediately.

Details of T+0 Settlement

Under the T+0 settlement system, transactions will occur simultaneously with the existing T+1 settlement cycle. This means that while the market is still adapting to the T+1 cycle, it is already contemplating the adoption of same-day settlement within a year. In the current T+1 system, sellers often have to wait until the following day to access the remaining 20% of their cash from the sale. However, with the introduction of T+0 settlement, sellers will have instant access to the entire proceeds on the day of the transaction, significantly improving liquidity and efficiency in the market.

Phases of T+0 Settlement

The rollout of the T+0 settlement system will take place in two phases. In Phase 1, transactions conducted up to 1:30 pm will be considered for settlement, which must be completed by 4:30 pm on the same day. Following this, Phase 2 will commence, where trading will take place from 1:30 pm to 3:30 pm, and Phase 1 operations will cease. Read also: SBI Announces Revision of Debit Card Charges This phased approach ensures a smooth transition to the new settlement system while maintaining operational efficiency and market stability. The introduction of the same-day transaction settlement system marks a significant milestone in the evolution of stock market operations. By enabling instant access to funds for sellers and reducing settlement times, the T+0 system promises to enhance liquidity and streamline trading processes. With a phased rollout starting today, market participants will closely observe the impact of this innovative initiative on market dynamics and efficiency.