T+0 Settlement: According to the order of market regulator SEBI, the stock market is going to implement T+0 trade settlement from March 28. But initially it will be implemented on shares of 25 companies.
What is T+0 Settlement System: If you also trade in the stock market , then this news is useful for you. The trading system in the market is going to change from today. Therefore it is important that you have advance knowledge about it. According to the order of market regulator SEBI, the stock market is going to implement T+0 trade settlement from March 28. But initially it will be implemented on shares of 25 companies. Currently this facility is in the form of testing, which will be available for 25 selected shares and selected brokers. Information about which brokers will be able to avail this facility will also be given later. Currently the stock market works on T+1 trading system.
What is T+0 settlement?
T+0 settlement simply means that the transaction of buying or selling your shares is completed on the same day. There is no delay of any kind in this system. You will be paid on the day you buy the shares and the shares will be transferred to your demat account on the same day . Similarly, you will get payment on the same day you sell the shares. SEBI is implementing it from 28th March. There will also be this option, you can select either T+0 or T+1 option for settlement.
What is Trade Settlement System?
Trade settlement is the process of completion of a trade transaction in the stock market . In this, exchange of shares and money takes place between the buyer and the seller. The faster the trade settlement, the sooner investors get money from their purchased and sold shares.
How is settlement of shares done in the market?
At present T+1 settlement system is applicable for all shares in the country’s stock market. That is, the money and shares of the shares you buy today are deposited in your demat account after T+1 i.e. one day. Similarly, even if you sell a share, you get the money in your bank account only on T+1 basis. For example, if an investor buys shares on Monday, those shares will show in his demat account on Tuesday. Along with the new upcoming system T+0, the existing T+1 system will also continue to operate.
Where can I get information about T+0 settlement?
You can get information related to T+0 settlement calendar from many places. The settlement calendar of T+0 will also be included in the settlement calendar document released every month by National Stock Exchange Clearing (NSE Clearing). Apart from this, you will also be able to get information about this from the broker.
What is the system to get quick money by selling T+0 shares?
If you sell a share in T+0 and want to get money quickly, then this facility is not available right now. You can quickly pay-in shares only through ‘Block Mechanism’. ‘Block mechanism’ means that you quickly withdraw the sold shares from your demat account and deposit them with the broker. This lets your broker know that you have shares to sell.
What is the limit for depositing shares in T+0?
At present there is no system for early deposit of shares in T+0. You can deposit shares quickly only through ‘Block Mechanism’. Talking about the time limit for deposit, whether you pay through UPI or not, the last time for depositing shares for everyone is till 1:45 pm on the business day.
Which shares will come under this scope?
BSE has released a list related to shares with T+0 settlement. This list includes Bajaj Auto, JSW Steel, LTIMindtree, Hindalco Industries, MRF, Vedanta, Ambuja Cement, State Bank of India, Bank of Baroda, Ashok Leyland, BPCL, Birla Soft, Cipla, Coforge, Divi’s Laboratories, Indian Hotels, LIC Housing Finance. Name has been given. Apart from this, Nestle India, NMDC, ONGC, Petronet LNG, Samvardhan Motherson International, Tata Communications, Trent, Union Bank of India will also be part of the beta edition of T+0 settlement.
T+1 system currently works.
Currently work is going on T+1 in the stock market. That means the settlement system of T+1 (trading+one day) is applicable. T+2 system is used in major stock markets around the world. In the stock markets of other countries, settlement of buying and selling takes place in two days. Currently the T+0 system is only in China. The T+1 system was implemented on January 27, 2023. Earlier there was T+2 settlement in India also.
Will every trade work as per T+0?
With the T+0 settlement system, transactions in the stock market will become faster than the current system. But it is not necessary that every trade will be settled as per T+0 as this facility will be different from T+1 settlement. There will be two types of settlement processes in the market from today. For the shares on which this facility will be available, you can select T+1 or T+0 settlement process as per your choice.
Challenges of the new system?
There are some challenges in implementing the T+0 settlement system. To implement this, changes will have to be made in the entire infrastructure system. This can be quite expensive. Secondly, problems may increase for small investors and companies. They have to settle their payments quickly so that transactions can be completed on time. After the implementation of this system, fluctuations in the stock market are expected to be greater. Could happen, especially when a lot of transactions are taking place.
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