SEBI Indefinitely Extends Deadline for Optional T+0 Settlement Cycle Implementation

Capital market regulator Securities and Exchange Board of India (SEBI) has indefinitely extended the deadline for Qualified Stock Brokers (QSBs) to implement systems and processes required for the optional T+0 rolling settlement in the equity cash market. The original deadline, set for May 1, 2025, was first extended to November 1, 2025, before this latest indefinite extension, in response to brokers facing operational and technological challenges.

SEBI’s move reflects the regulator’s pragmatic approach in balancing technological readiness of brokers with the goal of advancing market infrastructure. The T+0 settlement mechanism allows trades to be settled on the same day they are executed, as opposed to the current T+1 cycle where settlement occurs the next day. This faster settlement cycle aims to enhance liquidity, reduce counterparty risk, and improve overall market efficiency while boosting investor confidence.

In its latest circular, SEBI stated that the new timeline for T+0 implementation will be communicated at a later date, ensuring brokers have adequate time to upgrade and test their systems. The extension is intended to enable smooth implementation of the T+0 settlement framework without operational disruptions or compromising investor convenience.

The optional T+0 settlement framework was introduced in SEBI’s December 2024 circular, expanding settlement options alongside the existing T+1 cycle. Despite the extension, all other provisions of SEBI’s original directive remain unchanged. Market infrastructure institutions have been instructed to ready their systems and amend byelaws and rules accordingly to facilitate the transition once a new timeline is announced.

SEBI’s decision underscores its commitment to investor protection while nurturing India’s capital market toward a more efficient, future-ready trading ecosystem through the adoption of faster settlement cycles.