SEBI Indefinitely Halts T+0 Settlement Expansion Due to Low Investor Interest

Securities and Exchange Board of India (SEBI) has indefinitely delayed its plan to expand the T+0 (same-day) settlement cycle for stocks. This decision comes after a pilot program involving 25 stocks saw negligible investor interest and wafer-thin trading volumes. Qualified Stock Brokers (QSBs), who had largely completed their system upgrades (around 60-70%), expressed concerns about the business case and the potential for market liquidity fragmentation if a dual settlement system (T+0 and T+1) were to run concurrently. SEBI's official circular cited the need for more time for 'smooth implementation' by QSBs, but sources indicate this is an open-ended extension effectively halting the experiment for now. The market regulator previously planned to extend the optional T+0 framework to the top 500 stocks by market capitalization. Impact This pause means the Indian stock market will continue with the established T+1 settlement cycle, providing stability and avoiding potential disruptions from a new, untested dual-settlement environment. It reflects SEBI's cautious approach to market structure changes, prioritizing genuine market demand and readiness over rapid implementation. Investors can continue trading with the predictability of the T+1 system. Impact Rating: 7/10 Difficult Terms: T+0 Settlement: A trading settlement system where trades are completed and cash or securities are exchanged on the same day the trade occurs. T+1 Settlement: A trading settlement system where trades are completed and cash or securities are exchanged on the business day following the trade date. SEBI: Securities and Exchange Board of India, the primary regulatory body for India's securities market. Qualified Stock Brokers (QSBs): Stockbrokers that meet specific criteria set by SEBI, often involved in pilot programs or specialized market functions. Market Liquidity: The ease with which an asset can be converted into cash without affecting its price. High liquidity means assets can be traded quickly and easily. Dual Settlement System: A market system that allows for more than one settlement cycle to operate simultaneously, for example, both T+0 and T+1.