SEBI (Securities and Exchange Board of India) has now permitted 500 companies for the Same Day Settlement (T+0). The market regulator started this system on March 28 this year. Then only 25 companies of both the stock exchanges i.e. BSE and NSE could settle the funds after buying and selling shares in a day.
The new system will begin on January 31, 2025. SEBI wants to speed up the settlement system by allowing more companies to participate. Currently, the market practices the T+1 settlement system. This means that when you sell your shares, the bank will credit the entire amount to your account the next day.
Currently, the Indian stock market works on the T+1 settlement cycle
Currently, the Indian stock market works on the T+1 settlement cycle for all shares. T+0 means that the settlement of the purchase and sale of shares will happen on the same day. Before 2002, there was a T+5 settlement system in our country.
SEBI implemented a T+3 settlement in 2002. T+2 settlement was implemented in the year 2003. The market continued to work on this system till the year 2021. After this, authorities introduced the T+1 system. They implemented it in January 2023. With this, the settlement of funds and shares started happening in 24 hours.
SEBI – T+1, T+2 and T+3 settlement
The settlement system means the transfer of shares to the buyer’s account and the transfer of the amount of shares sold to the seller’s account. Indian stock exchanges currently follow T+1. This means that funds and securities come to your account within 24 hours of the order execution.
Suppose you sold shares on Wednesday. According to T+1, the system will transfer the money for these shares to your account in 1 business day. On the other hand, if you bought shares, then the system will credit these shares to your demat account in 1 day. The same rule applies to T+2 and T+3 settlements as well.
