Sebi extends timeline for optional T+0 settlement cycle for QSBs to November 1

Capital markets regulator Securities and Exchange Board of India (Sebi) said on Tuesday that it has extended the timeline for its optional T+0 settlement cycle for qualified stock brokers (QSBs) to November 1, for putting in place the necessary systems and processes for enabling seamless participation of investors.

In its earlier circular dated December 10, 2024, Sebi said that the operational readiness for its optional T+0 settlement cycle was May 1, 2025. Sebi said that the timeline has been extended based on the feedback received from QSBs and subsequent discussions with stock exchanges, clearing corporations, deposits, and QSBs. All other provisions of the Sebi circular dated December 10, 2024, remain unchanged.

Earlier this month, the newly appointed Sebi chairman Tuhin Kanta Pandey told Fortune India that Sebi is taking a measured view of whether the accelerated settlement mechanism from T+1 to T+0 is essential for the market’s long-term architecture or simply a technological milestone that doesn’t require universal adoption.

Pandey firmly pushed back against the idea that shortening the settlement cycle is turning the market into a trader’s arena. “That comparison is not appropriate. You’re comparing apples and oranges,” he said, addressing concerns that T+0 might fuel excessive churn and dilute the ethos of long-term investing.

The new Sebi chief believes that the transition to T+0 enhances investor protection by ensuring that clearing corporations directly credit securities to demat accounts, bypassing intermediaries. “Securities are safe because the clearing corporation directly credits them to your demat account, not through brokers. To that extent, this system is superior in terms of investor protection, money protection, and securities protection,” he said.

In fact, India has taken a global lead in this area. In March 2024, the regulator introduced the optional T+0 settlement system with an initial pilot set of 25 stocks. Building on this, the regulator, starting January 31, 2025, allowed the T+0 mechanism to be expanded in phases to 500 top stocks by market capitalisation, beginning with the bottom 100 stocks in that list. Each month, an additional 100 would be brought under the optional T+0 mode, gradually broadening the experiment.

Pandey emphasised that shorter settlement cycles are about boosting investor trust, improving capital efficiency, and minimising risk, not altering the fundamental nature of market participation. “Why should an investor’s money be locked up? You’re only trying to ensure that money doesn’t lie with brokers—it lies with investors,” he noted.

At the historic 150th anniversary of the BSE earlier, Finance Minister Nirmala Sitharaman hailed India’s T+1 settlement regime as a cornerstone of its capital market evolution—one that has not only transformed domestic market infrastructure but also made global peers sit up and take notice.

Recalling her recent visit to the U.K. for the annual economic and financial dialogue, Sitharaman shared how the mention of India’s T+1 settlement sparked a mix of admiration and surprise among British officials. “It gave me immense satisfaction to sit in London and say that we are far ahead,” she said. “T+1 is a pole star they have yet to reach.”