Know what is T+0 trade settlement in stock market and how it will work

What is T+0 trade settlement: The Securities and Exchange Board of India (SEBI) is finally going to implement the much-awaited T+0 trade settlement. Along with this, the trading cycle in the stock market has been further shortened.

Of course, there are some challenges with this new system. Of course, T+0 trade settlement is going to be implemented in selected company shares from tomorrow. Although there may be some challenges with this new system, the regulatory body will assess these challenges appropriately.

What is T+0 settlement?
T+0 SettlementS refers to the settlement cycle, where the settlement will take place on the same day of the transaction i.e. on the same day as the trade date, thus there will be no delay in the transaction.

Does any other country in the world have T+0 system?

• Although the T+0 settlement system is a very different settlement cycle from T+1 or T+2 settlement, there is instability in it in some countries of the world.
• T+0 settlement in some securities is offered by Moscow Exchange (MOEX) and Korea Exchange (KRX) in Russia and South Korea.
• Apart from this, Taiwan Stock Exchange (TWSE) also has T+0 settlement. Where it handles government bonds and some exchange-traded funds (ETFs).
• The Hong Kong Stock Exchange (HKEX) offers T+0 settlement on some transactions.

How will T+0 settlement system work?

• The capital markets regulator had proposed to implement T+0 settlement for the equity cash segment in two phases. The current T+0 agreement is proposed to be implemented in two phases. An option for small settlements will be introduced in addition to the current T+1 settlement cycle.
• Experts believe that this system is being introduced to reduce settlement time and bring more transparency in Indian securities and shares.
• In the first phase, an optional T+0 settlement cycle will be implemented in shares of a particular company for transactions up to 1:30 pm. In which the settlement process will be completed by 4:30 pm.
• In the second phase, an alternative trade-to-trade agreement can be made. In the second phase, business timings will be till 3:30 pm.