SEBI Extends T+0 Settlement Deadline to November 1 Amid Industry Feedback​

In a major step meant to smooth the path toward faster trade settlements, the Securities and Exchange Board of India (SEBI) has extended the deadline for implementing the optional same-day (T+0) settlement cycle for Qualified Stock Brokers (QSBs) from May 1, 2025, to November 1, 2025. ​

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Background and Rationale

The T+0 settlement cycle introduced by SEBI was given as an optional measure to improve settlement efficiency and mitigate risks. This is one of many measures to modernise India's securities market infrastructure. 

The initial T+0 settlement was a pilot project that commenced in March 2024 with 25 stocks. This option was soon opened for the 500 companies listed by market capitalisation as of December 31, 2024. The expansion was to be done slowly, commencing from January 31, 2025, by including 100 companies monthly. 

However, the major feedback of all affected parties, including stock exchanges, clearing corporations, depositories, and quick settlement brokers (QSB), pointed to the need for more time to develop systems and processes. Essential challenges in this regard included the operational and regulatory environment focusing on risk management and order processing systems. ​

SEBI's Official Statement

In its circular dated April 29, 2025, SEBI stated:​

"Based on the feedback received from QSBs, subsequent discussions with Stock Exchanges, Clearing Corporations, Depositories, and QSBs, and to ensure smooth implementation of the same, it has been decided to extend the timeline for QSBs for putting in place the necessary systems and processes for enabling seamless participation of investors in optional T+0 settlement cycle, to November 1, 2025." ​

SEBI also clarified that all other provisions outlined in its earlier December 10, 2024 circular remain unchanged.​

Implications for Market Participants

However, the extension gives QSBs, including major Indian broking firms, additional time to improve their infrastructural support for the T+0 settlement cycle. 

For investors, the optional T+0 settlement enables quick access to funds and securities, thereby improving liquidity and possibly reducing counterparty risks. Nonetheless, due to the optional nature of the mechanism, investors must decide whether to continue with traditional T+1 settlement or switch to T+0, depending upon their preferences and those of their brokers.

Future Outlook

SEBI's decision to extend the deadlines is truly symbolic of SEBI's pragmatic approach and consultative style of working in implementing these significant market reforms. Concerned about becoming operationally burdened, its purpose is to ensure the successful adoption of the T+0 settlement cycle while leaving existing market dynamics undisturbed. 

In the run-up to the new deadline, it will be important for QSBs and other market infrastructure institutions to hasten their preparation for the requirements pertinent to the T+0 settlement mechanism. During the next implementation period, SEBI is expected to pursue engagement with stakeholders to take stock of progress and resolve other issues arising. 

The extension of the T+0 settlement deadline reveals the complexities involved in reforming the payment systems and the importance of stakeholder readiness for such initiatives. 

For more details, interested readers may look at SEBI's official circular on this development, issued on April 29, 2025.