By Bharath Rajeswaran
BENGALURU (Reuters) -India’s Bajaj Auto, Bharat Petroleum and State Bank of India are among 25 stocks eligible for optional same-day settlement starting from March 28, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) said on Wednesday.
Indian markets operate on a T+1 settlement cycle for all stocks currently, which means that the purchase and sale of shares will reflect in the demat accounts of investors one day after the transaction.
The new T+0 settlement cycle reduces transactional risks and enhances market efficiency by providing immediate liquidity to investors, said analysts at ICICI Direct.
Implementing this could also result in increased trading opportunities and reduced settlement risks for investors, they added.
The T+0 settlement will be optional for 25 stocks and will be applicable only for trades executed between 9:15 a.m. and 1:30 p.m. IST, India’s markets regulator Securities and Exchange Board of India (SEBI) said in a circular on March 21.
Prices in T+0 will not be considered for index calculation or computing settlement price of shares, SEBI had said.
To avoid market distortions due to price discrepancies for shares trading in both settlement cycles, trading in the T+0 cycle will be subject to a price band of 100 basis points above or below prices under the T+1 cycle, according to both NSE and BSE.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Shounak Dasgupta)
