ONE
HOUR SETTLEMENT OF TRADE - ECONOMY
News:
SEBI may implement
one-hour settlement of trades by March 2024, instantaneous settlement by Oct
2024
What's
in the news?
● The
Securities and Exchange Board of India's (SEBI's) sources revealed plans to
overhaul the settlement process in the Indian stock market, aimed at
significantly reducing the time taken for trade settlements.
Key
takeaways:
● As
per the sources, SEBI is gearing up to implement a one-hour settlement of
trades.
● The
move, scheduled to come into effect by March 2024, is expected to expedite the
settlement process, allowing investors to access their funds and securities
within a mere one-hour timeframe after the trade execution.
About
the scheme:
● Under
this scheme, when an investor sells a share, the money from the sale will be
credited to their account within one hour, and the buyer will receive the
purchased shares in their DEMAT account within the same time frame.
● Currently
operating on a T+1 settlement cycle, where trade-related settlements occur within 24 hours.
Benefits:
● Faster
Transactions
● Enhanced
Liquidity
● Risk
Reduction
● Investor
Convenience
Challenges:
● Requires
advanced technology
● Need
for high technical infrastructure