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

SEBI/Exchange

Updated on 02 Nov 2025, 02:57 pm

Reviewed By

Aditi Singh | Whalesbook News Team

Short Description :

India's market regulator, SEBI, has indefinitely postponed its plan to expand the T+0 (same-day) settlement cycle. The decision follows negligible investor interest and minimal trading volumes in the pilot phase, alongside concerns about fragmenting market liquidity and operational complexities. Brokers, despite partial readiness, requested the framework be made optional, citing a lack of a viable business case. This effectively puts the same-day settlement experiment on hold, maintaining the current T+1 settlement cycle.

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

▶

Detailed Coverage :

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.