MUMBAI: The Securities and Exchange Board of India is aiming to launch a one-hour settlement of trades by March next year and instantaneous settlement by October 2024, its Chairperson Madhabi Puri Buch said on Tuesday.
“India is the first jurisdiction in the world that has moved to T+1 (trade date plus one day) settlement. We are now talking about a one-hour settlement and that will be a stepping stone to instantaneous settlement. This will be in a reasonably short period of time,” said Buch at the Global Fintech Fest.
“Technology already exists to launch up to one-hour settlement; we just have to make it happen. For instantaneous settlement, the system needs some more technological developments, which could take another 6-8 months,” she added. Earlier this year in July, Sebi Chairpers had said that instant settlement in Indian stock markets is not very far.
Under T+1 settlement, the transfer of securities and funds takes place the following day of the trade. In the one-hour settlement system, shares will be credited to the demat account within an hour. The early settlement facility will be optional for investors and they can opt out of it.
The capital market regulator is also looking to streamline secondary market operations. The regulator is planning to implement an ASBA (Application Supported by Blocked Amount) model for the secondary market, similar to the process used in initial public offerings (IPOs). This change is expected
to be rolled out as early as January 2024, making secondary market investments more secure and efficient.