T+0 Settlement
T+0 settlement is a same-day settlement mechanism for equity trades in India, introduced by SEBI as an optional beta facility in March 2024, under which the buyer receives shares and the seller receives funds on the same day the trade is executed, eliminating overnight counterparty and settlement risk.
India's equity settlement cycle has historically moved from T+5 (until 2002) to T+3 (2002-2004) to T+2 (2004-2018) and then to T+1 (from January 2023), with the SEBI circular mandating full T+1 settlement across all listed securities by January 2023 — the first major market globally to achieve this. The T+0 settlement mechanism, announced in SEBI's circular of March 2024, represents the next step in compressing the settlement cycle.
Under the T+0 beta framework, trades executed in a designated T+0 settlement window (initially 9:15 AM to 1:30 PM on both NSE and BSE) in a select list of 25 scrips were eligible for same-day settlement. Buyers were required to have 100% of the trade value blocked in their trading account before placing the order, and sellers were required to have shares available in their demat account. The clearing corporation (NSCCL/ICCL) nets the obligations and credits shares and funds by 4:30 PM on the same day.
The benefits of T+0 include: (a) elimination of settlement risk — since funds and shares are transferred on the same day, there is no overnight counterparty exposure; (b) immediate release of margin for traders; (c) faster receipt of sale proceeds enables reinvestment on the same day. For retail investors who frequently sell one stock to buy another, T+0 removes the friction of waiting for T+1 funds to become available.
However, T+0 also introduces challenges: it requires all intermediaries in the settlement chain — clearing banks, DPs, clearing members — to be capable of same-day settlement processing. Global custodians managing FPI accounts raised concerns about the operational feasibility of same-day instruction processing across time zones.
SEBI's phased approach — first T+1 globally, then T+0 as optional — is designed to allow market infrastructure to adapt before T+0 is mandated. The ultimate regulatory goal, as stated in SEBI circulars, is instantaneous (T+0 intraday or even 'continuous') settlement for certain categories of trades.