Exchanges roll out beta version of same-day settlement

Exchanges rolled out the beta version of T+0, or same-day settlement, on Thursday.

Investors can transact in 25 securities in T+0 settlement. T+0 facilitates quicker receipt of funds and securities in investor accounts, reducing the risks associated with the time lag.

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Sixty-three members participated in this optional segment on the BSE. Forty-one members traded in 10 stocks and placed a total of 329 orders which resulted in 90 trades. Unique investors using this facility stood at 49.

On NSE, 66 trading members placed 209 orders for 87 unique PANs in 24 stocks. This resulted in 46 trades in 14 stocks.

Sundararaman Ramamurthy, Managing Director and CEO at BSE, said: “This is a significant step towards greater efficiency and reduced risk in our market. We are confident that this optional settlement cycle will contribute to the continued growth and development of the capital markets in India.”

No institutional participation

The value of trades placed on Thursday was on the lower side, according to a broker. The trades were from individuals and prop traders, with no institutional participation. Many brokers are not ready with their systems in their entirety for same-day settlements, he said.

“Same-day settlement could be highly beneficial to retail investors who come with limited cash into the market. Shortening of the settlement cycle means optimal utilisation of funds and will help swing traders to make best in time returns,” said Prashanth Tapse, Senior V-P (Research), Mehta Equities.

Same-day settlement will be in addition to the existing T+1 settlement cycle and will be a precursor to instant settlement that may be rolled out on an optional basis at a later date.

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