The Securities and Exchange Board of India (SEBI) has been working steadily to make India’s capital markets faster, safer, and more efficient. One of the most significant changes in recent years is the introduction of the T+0 settlement cycle, which allows trades to be settled on the very same day.
Traditionally, Indian markets followed a T+1 settlement system, where trades executed on a given day (T) were settled the following business day (+1). This worked well but still involved a delay in accessing funds or shares. By rolling out the optional T+0 system, SEBI is modernising India’s trading infrastructure, bringing it closer to global best practices while offering investors faster liquidity and reduced settlement risk.
What Is the T+0 Settlement Cycle?
In simple terms, T+0 settlement refers to the completion of a trade—including the transfer of securities to the buyer and funds to the seller—on the same trading day.
SEBI launched the T+0 cycle in a beta pilot phase on 28 March 2024 for 25 selected stocks. It was introduced alongside the T+1 cycle, giving investors the flexibility to choose between the two.
To ensure smooth functioning, SEBI set certain conditions:
- Trades under T+0 must take place between 9:15 am and 1:30 pm IST.
- A price band of ±100 basis points relative to T+1 prices applies to avoid sharp distortions.
The aim is to provide a gradual, controlled rollout, allowing brokers, exchanges, and clearing corporations to upgrade their systems.
Timeline of Implementation
SEBI adopted a phased approach to expanding the T+0 cycle.
| Phase | Description |
| Pilot | March 2024: Launched for 25 stocks with optional T+0 settlement |
| Expansion | From 31 January 2025: Monthly rollout of 100 additional stocks, covering the top 500 by market capitalisation |
| Full Rollout | By May 2025: All 500 stocks included, with block deal window introduced in the morning session |
| Broker Readiness | Implementation deadline extended to 1 November 2025 to give intermediaries more time |
This careful phasing ensures the system remains robust while market participants adjust operationally and technologically.
Why Does the T+0 Cycle Matter?
The shift to same-day settlement has wide-ranging benefits for investors, traders, and the broader market.
Faster Access to Capital
Investors no longer need to wait until the next day to use their money or securities. This provides immediate liquidity, allowing traders to reinvest proceeds, withdraw funds, or adjust positions within the same session.
Reduced Settlement Risk
By shortening the settlement window, the chances of counterparty default or systemic disruption fall significantly. Faster settlement also lowers exposure to market volatility between trade and settlement.
Improved Market Efficiency
The T+0 system encourages greater participation by day traders, high-frequency traders, and institutional players. With quicker fund turnover, trading strategies become more flexible, supporting a dynamic and liquid market.
Alignment with Global Best Practices
Several developed markets already use shorter settlement cycles. By adopting T+0, India positions itself as a progressive, globally competitive market, attractive to foreign investors.
Challenges in Adoption
While the benefits are clear, rolling out T+0 settlement is not without hurdles.
- Technology Infrastructure – Brokers, depositories, and clearing corporations must upgrade systems to handle real-time processing.
- Operational Readiness – Middle and back-office operations, including reconciliation and fund transfer systems, need alignment.
- Liquidity Management – Investors and brokers must plan cash and securities availability carefully to avoid settlement failures.
- Cost Implications – Faster settlements may increase operational expenses initially for intermediaries.
These challenges explain why SEBI opted for a phased rollout, ensuring stability and giving participants time to adapt.
The Road Ahead
By extending the deadline to 1 November 2025, SEBI has shown flexibility, acknowledging that the transition demands time and investment. However, once fully implemented, the T+0 cycle is expected to:
- Strengthen investor confidence through reduced risks.
- Increase turnover and trading activity in equities.
- Support new market products and strategies that rely on rapid fund availability.
Conclusion
The introduction of SEBI’s T+0 settlement cycle marks a significant milestone in India’s capital market evolution. By enabling same-day settlement, it provides faster access to funds, reduces systemic risk, and enhances market efficiency. Although the transition requires technological and operational adjustments, the long-term benefits are substantial.
For investors, the key takeaway is that India is moving towards a faster, safer, and more efficient trading environment. With the T+0 cycle set to cover the top 500 stocks by late 2025, market participants should prepare for a more agile ecosystem that aligns with global standards.
