The Securities and Exchange Board of India (SEBI), the country’s apex market regulator, has unveiled ambitious plans to revamp the trade settlement process within the Indian stock market. The objective is to dramatically reduce the settlement time, thereby enhancing the trading experience for investors.
In a recent disclosure, sources within SEBI shared that the regulator is on track to introduce a one-hour trade settlement system by March 2024. Once operational, this system will facilitate investors in accessing both their funds and securities merely an hour post-trade execution. This shift aims to expedite the liquidity process and streamline trading operations.
But the advancements don’t stop there. SEBI’s vision extends beyond the one-hour settlement. The regulator is pushing the envelope further by setting sights on achieving instantaneous trade settlements by October 2024. This move signifies a monumental change in trade processing and has the potential to reshape the dynamics of stock trading in India.
Parallelly, to support these ambitious changes, SEBI is ramping up its infrastructural capacities. Preparations are underway to enhance the resilience of the system, particularly concerning broker and exchange or clearing corporation (CC) contingencies. In a proactive measure, exchanges and CCs are transitioning to a software-as-a-service model. This setup ensures trading continuity, even if one exchange or CC faces disruptions.
Moreover, as a part of this fortified framework, data from one exchange will be hosted on the infrastructure of another. This arrangement ensures real-time, instantaneous data updates, further securing the trading ecosystem.
Additionally, SEBI is deliberating a system that grants direct exchange access to broker clients. This provision is designed to empower clients to manage and close out their positions autonomously, especially in scenarios where their broker might face technical glitches or other unforeseen issues.
