The National Stock Exchange (NSE) has postponed the decision to implement T+0 settlement cycle in the capital market segment till further notice. NSE today (September 27) said that now a separate circular will be issued for when this will be implemented.
Under this settlement cycle, the trade is settled on the same day the order is placed. That is, the day the shares are sold, the entire money is credited to the account on the same day. Earlier, market regulator Security and Exchange Board of India had implemented T+0 settlement on optional basis in the stock market from March 28.
After this, along with the National Stock Exchange, Bombay Stock Exchange started the trial of T+0 settlement system for 25 shares including Ambuja Cements, Ashok Leyland and Bajaj Auto.
Currently the Indian stock market works on T+1 settlement cycle.
Currently the Indian stock market works on T+1 settlement cycle for all shares. T+0 means settlement of purchase and sale of shares will happen on the same day. There was a T+5 settlement system in our country before 2002.
SEBI implemented T+3 settlement in 2002. T+2 settlement was implemented in the year 2003. The market continued to work on this system till the year 2021. After this the T+1 system was introduced. It was implemented in January 2023. Due to this, settlement of funds and shares started taking place within 24 hours.
What is T+1, T+2 and T+3 settlement?
Settlement system means transfer of shares to the buyer's account and transfer of the amount of sold shares to the seller's account. Indian stock exchanges currently follow T+1. This means that the funds and securities are credited to your account within 24 hours of order execution.
Suppose you sold shares on Wednesday. According to T+1, the money for these shares will be transferred to your account in 1 business day. If you have purchased shares, then these shares will be credited to your demat account within 1 day. This same rule also applies in T+2 and T+3 settlements.
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