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Ahmedabad. Market regulator Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch said that SEBI will soon present a proposal to implement T + Zero Day Settlement System before its board.
Which will be applicable to all brokers. The T0 settlement system was implemented on a voluntary basis in March this year. SEBI has given time to all brokers to adjust to the T+0 settlement system. Now under the new system, stocks and funds will be deposited in the accounts of buyers and sellers who traded till 1:30 pm during the trading session in the stock market by the end of the same day. Currently, the system prevalent in the market is T+1 settlement. In which stocks and funds are deposited in the accounts of buyers and sellers on the next working day.
The SEBI chairman said that the regulator is working on reducing the minimum amount to be invested in a mutual fund scheme through the Systematic Investment Plan (SIP) route to Rs 250. Because, currently many mutual fund managers offer investments through SIP as per the minimum prescribed size of Rs 500. SEBI further said that it will insist on strict adherence to KYC for investments in self-regulated entities and will not tolerate irregularities like Paytm. Last January, banking regulator Reserve Bank of India (RBI) ordered Paytm Payments Bank to shut down its services. Because, KYC rules were openly violated on many occasions by Paytm. RBI took strict action when Paytm Payments Bank continued to violate KYC rules despite the regulator's warning.
What will happen in the new system?
Under the new system, stocks and funds will be credited to the accounts of buyers and sellers trading in the stock market during the trading session from 1:30 pm till the end of the same day.
Other proposed actions by SEBI
The regulator is currently working on reducing the minimum amount for investing through the SIP route in mutual fund schemes to Rs 250.
SEBI will insist on strict adherence to KYC for investments in self-regulated institutions and will not tolerate irregularities like Paytm.
Consider applying ASB also to secondary market deals like IPOs
According to the SEBI chairperson, the currently applicable system for the IPO market, the Application Supported by Blocked Amount (ASBA) system, is being considered to be made mandatory for eligible stock brokers operating in the secondary market. ASB is a system under which, as soon as an investor applies for share subscription, the amount payable for this application is blocked in his account. Although this amount remains in the investor's account and the investor gets interest on it, the investor cannot use it until the amount is blocked. This amount gets unblocked if shares are not allotted under the IPO. SEBI now wants to implement such a system for transactions in the secondary market as well.
