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.

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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.