Context

• • Capital markets regulator Securities and Exchange Board of India (SEBI) has approved the launch of the beta version of the T+0 settlement on an optional basis from March 28. 

• T+0 settlement means that the funds and securities for a transaction will be settled on the day the trade was entered into.

• The SEBI has said that the market regulator will review the progress at the end of three months and six months from the date of this implementation, and decide on further course of action. 

What is meant by trade settlement?

• ‘Settlement’ is a two-way process that involves the transfer of funds and securities on the settlement date. As of now, there is a lag between trade and settlement — the settlement date is different from the trade date. 
• A trade settlement is said to be complete once purchased securities of a listed company are delivered to the buyer, and the seller gets the money.
• The current cycle of ‘T+1’ in India means trade-related settlements happen within a day, or within 24 hours of the actual transaction. The migration to the T+1 cycle came into effect in January this year.
• India became the second country to start the T+1 settlement cycle in top listed securities after China, bringing operational efficiency, faster fund remittances, share delivery, and ease for stock market participants.

What will change for investors with T+0?

• Under the current T+1 settlement cycle, if an investor sells securities, the money gets credited into her account the following day. Under the T+0 settlement cycle, if investors sell shares, they will get the money in their account instantaneously, and the buyers will get the shares in their demat accounts the same day.

https://newsonair.gov.in/sebi-approves-launch-of-beta-version-of-t0-settlement-on-optional-basis/