Capital markets regulator Securities and Exchange Board of India (SEBI) has issued a fresh circular to enhance the scope of "optional T+0 rolling settlement cycle" in equity cash markets to the top 500 scrips. The market watchdog says that based on the feedback received from stakeholders, it has decided to enhance the scope of the optional T+0 settlement cycle to the top 500 scrips in terms of market capitalisation as of December 31, 2024.

"The scrips will be made available for trading and settlement starting with scrips at bottom 100 companies out of the aforesaid 500 companies and gradually include the next bottom 100 companies every month till top 500 companies are available for trading in optional T+0 settlement cycle," says SEBI via the latest circular.

These scrips will be in addition to the existing 25 scrips available for trading and settlement under the Beta version of the optional T+0 settlement cycle.

SEBI on March 21, 2024, had introduced the beta version of the T+0 rolling settlement cycle on an optional basis, in addition to the existing T+1 settlement cycle in equity cash markets, for 25 scrips and with a limited number of brokers. To enable smooth implementation and avoid any disruptions in the beta version, the mechanism was enabled only for non-custodian clients from March 28, 2024.

In today's circular, on participation by stock brokers, SEBI says they can participate in the optional T+0 settlement cycle and charge differential brokerage for T+0 and T+1 settlement cycles, within the regulatory limit.

On the participation by qualified stock brokers (QSBs), the SEBI circular says those who meet the parameter of the minimum number of active clients as of December 31, 2024, will put in place systems and processes for enabling T+0 settlement.

In case of a change in the list of QSBs, the new ones will put in place the systems and processes in 3 months.

The stock exchanges, clearing corporations, depositories and custodians will also put in place the systems and processes to facilitate the new system.

For a block deal window in the T+0 settlement cycle, SEBI has allowed a mechanism to be put in place by the stock exchanges, which will be available only for the morning session from 8:45 am to 9:00 am in addition to the existing block deal windows of 8:45 am to 9:00 am and 2:05 pm to 2:20 pm for T+1 settlement cycle. "The trades in optional T+0 block window session will be settled on the T+0 settlement cycle," says the regulator.

Participation under this window will be optional for the investors. The MIIs will publish the operational guidelines with the list of eligible scrips and list of QSBs for the optional T+0 settlement cycle and disseminate it. They will also provide a fortnightly report on this.