The Securities and Exchange Board of India (Sebi) clarified that there are no current plans to mandate T+0 settlement, which would involve settling trades on the same day they are executed. Instead, Sebi is focusing on expanding the Application Supported by Blocked Amount (ASBA) facility to a wider range of financial transactions.
The decision to not enforce T+0 settlement stems from the need to maintain stability and ensure that the market infrastructure can handle such a significant change without disruption. While the idea of same-day settlement offers potential benefits like reduced counterparty risk and increased liquidity, it also requires substantial technological upgrades and coordination among various market participants.
On the other hand, the expansion of the ASBA facility is aimed at enhancing investor convenience and security. ASBA, which currently allows investors to apply for public issues while their funds remain in their bank accounts until the allotment is finalized, is set to be extended to cover more types of transactions. This move will streamline the process for investors and reduce the risks associated with the traditional methods of handling funds during financial transactions.
Sebi's balanced approach reflects its commitment to fostering a secure and efficient market environment. By prioritizing the expansion of ASBA and maintaining the current settlement timelines, Sebi aims to enhance market operations while ensuring the stability and reliability of the financial system.
