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regular-article-logo Thursday, 23 May 2024

T+0 makes soft start: BSE releases list of 25 stocks eligible for same-day settlement

Market circles said the numbers should not come as a surprise, given the limited number of brokers and the scrips, and it shows a slow modest beginning to the new system

Our Special Correspondent Mumbai Published 29.03.24, 10:16 AM
Representational image

Representational image File image

The system of same-day settlement in stocks (T+0 trades) kicked off on the bourses on Friday without any hitch, though both the BSE and NSE witnessed token trades.

“On the first day, 63 members participated in this optional segment. As many as 41 members traded in 10 scrips and placed a total of 329 orders which resulted into 90 trades. Unique investors using this facility stood at 49,” said stock exchange BSE.

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The exchange did not disclose the 10 scrips in which the investors chose the T+0 option.

Media reports said NSE reported 209 orders from 89 unique investors in 24 securities. NSE made the first payout for these trades before 4:30pm.

The new system, which is on an optional basis, has been rolled out for select stocks. It will be in addition to the existing T+1 settlement cycle in the equity cash market. Further, the option is available for only 25 scrips and with a limited number of brokers.

While the exchanges have disclosed the identity of 25 shares where the T+0 option will be available, they are yet to announce the list of brokers who can offer this facility to their clients. This is expected to be done over the weekend.

Market circles said the numbers should not come as a surprise, given the limited number of brokers and the scrips, and it shows a slow modest beginning to the new system.

They said the key strength of the new system is it will increase the liquidity of scrips as the shares will be credited to the buyers account on the same day while the seller will get the proceeds similarly. Further, it will reduce the counter-party risk.

But on the flip side, it could increase volatility.

According to Arvinder Singh Nanda, senior vice-president of Master Capital Services Ltd, investors will get multiple benefits from the T+0 settlement.

“Another benefit is reduced credit risk. The shorter the time between trade execution and settlement, the lower will be the risk of default by either party. Investors will also benefit from improved market efficiency because faster settlement cycles can lead to a more dynamic and efficient market,’’ he said.

The beginning of the optional T+0 settlement coincided with a strong market on the last working day of the 2023-24 fiscal.

The 30-share BSE Sensex rose 655.04 points or 0.90 per cent to settle at 73651.35.

“The surge in the Indian equity market can be attributed primarily to the robust fundamentals of the Indian economy, resilient in the face of global challenges,” Sunil Nyati, MD, Swastika Investmart, said.

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