T+0 settlement to be optional at first, limited to 25 stocks

Currently, Indian equity markets follow the T+1 settlement system, where stocks and are settled the day after the trade.

To start with, the new trade settlement system will run in tandem with the existing T+1 cycle in the equity cash market. It will be applicable for 25 stocks and only select brokers can participate in the new system, said the regulator.

There would be one continuous trading session from 9:15 a.m. to 1:30 p.m.

All investors would be eligible to participate in the T+0 trade settlement cycle if they are able to meet the timelines and risk requirements of stock exchanges, Sebi said.

The price in the T+0 segment will operate with a price band of +100 basis points (1 percentage point) from the price in the regular T+1 market. This band will be re-calibrated after every 50 basis points movement in the underlying T+1 market, Sebi said in a circular.

The regulator added that T+0 prices will not be considered in index calculation and settlement price computation. Besides, there would be no separate closing price for securities based on trading in the T+0 segment.