BSE Announces T+0 Settlement Cycle for 25 Stocks Starting from Tomorrow

The Bombay Stock Exchange (BSE) has announced the introduction of a shortened settlement cycle for 25 select stocks, effective from tomorrow. The T+0 or Trade+0 settlement cycle facilitates the transfer of securities and funds on the same day as the trade.

The introduction of a T+0 settlement cycle will run parallel to the existing T+1 settlement cycle in the equity cash market. Shorter settlement cycles like T+0 will increase liquidity in the market and lower risk.

The Securities and Exchange Board of India (SEBI), the market regulator, had previously issued a framework for the introduction of the beta version of the T+0 trade settlement cycle on an optional basis. Initially, this option will be available for a limited number of stocks and brokers.

SEBI stated that a shortened settlement cycle would bring cost and time efficiency, transparency in charges to investors, and strengthen risk management at clearing corporations and the overall securities market ecosystem. All investors will be eligible to participate in the T+0 settlement cycle provided they meet the prescribed timelines, processes, and risk requirements as specified by market infrastructure institutions.

Trade timings for the T+0 settlement cycle will be between 9:15 am and 1:30 pm. Trading in the T+0 cycle will be subject to a price band of 100 basis points above or below prices under the T+1 cycle, according to BSE.

After the introduction of the beta version of T+0 settlement, all charges or fees such as Transaction Charges, STT, and Regulatory/Turnover Fees applicable for T+1 settled securities will apply to T+0 settled securities, BSE said.

Stocks List

BSE has designated 25 stocks eligible for the T+0 cycle. These include Ambuja Cements, Ashok Leyland, Bajaj Auto, Bank of Baroda, Bharat Petroleum Corporation Ltd, Birlasoft, Cipla, Coforge, Divi’s Laboratories, Hindalco Industries, Indian Hotels, JSW Steel, LIC Housing Finance, LTIMindtree, MRF, Nestle India, NMDC, Oil and Natural Gas Corporation, Petronet LNG, Samvardhana Motherson International, State Bank of India, Tata Communications, Trent, Union Bank of India, and Vedanta.

With this development, the Indian stock market takes a significant step towards enhancing efficiency and reducing settlement times, ultimately benefitting market participants.

Disclaimer: This post has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.