SEBI Announced Expansion of T+0 Settlement Cycle for Top 500 Stocks

Current Context: On 10th December 2024, The Securities and Exchange Board of India (SEBI) announced the expansion of the optional T+0 settlement cycle to the top 500 stocks by market capitalization, starting January 31, 2025.

• Here are some key points:
• Phased Implementation: The rollout will begin with the bottom 100 companies and gradually include the next 100 companies each month until all 500 stocks are covered.
• Differential Brokerage: Stock brokers can charge different brokerage fees for T+0 and T+1 settlements, within regulatory limits.
• Block Deal Window: A separate block deal window for T+0 settlements will operate from 8:45 AM to 9:00 AM daily.
• Qualified Stock Brokers (QSBs): QSBs must set up systems for seamless participation, and newly designated QSBs will have three months to comply with these requirements.
• Market Infrastructure: Exchanges, clearing corporations, depositories, and custodians must develop infrastructure to enable institutional investors to participate in T+0 settlements.

Question:

1 Which entities are required to develop infrastructure for institutional investor participation in the T+0 settlement cycle?

• A) Only stock exchanges
• B) Only custodians
• C) Exchanges, clearing corporations, depositories, and custodians
• D) Only clearing corporations

Answer: C) SEBI mandates that all market infrastructure entities, including exchanges, clearing corporations, depositories, and custodians, develop systems to enable institutional investors to participate in T+0 settlements.