Description

SEBI extends the November 1, 2025 deadline for Qualified Stock Brokers to implement systems for optional T+0 settlement cycle, with new timeline to be announced later due to readiness challenges.

Summary

SEBI has further extended the deadline for Qualified Stock Brokers (QSBs) to implement necessary systems and processes for enabling investor participation in the optional T+0 settlement cycle. The November 1, 2025 deadline has been postponed, with further guidance to be provided at a later date. This is the second extension, following an earlier postponement from May 1, 2025. The decision responds to challenges highlighted by QSBs in ensuring timely system readiness.

Key Points

  • Second Extension Granted: The mandatory implementation deadline for QSBs has been extended beyond November 1, 2025
  • New Timeline Pending: Further guidance regarding the revised timeline will be intimated at a later date
  • Scope Unchanged: The optional T+0 settlement cycle framework established in December 2024 remains in effect
  • QSB Requirements: QSBs meeting minimum active client parameters as of December 31, 2024 must eventually implement required systems
  • Previous Extensions: Original May 1, 2025 deadline was previously extended to November 1, 2025 via circular dated April 29, 2025
  • Reason for Extension: Challenges in ensuring timely readiness of systems and smooth implementation

Regulatory Changes

No new regulatory framework changes are introduced. This circular solely extends the compliance timeline for existing requirements under SEBI Circular No. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/172 dated December 10, 2024. All other provisions of the December 2024 circular remain unchanged, including:

  • The optional nature of T+0 settlement cycle alongside T+1
  • Qualification criteria for QSBs
  • System and process requirements for seamless investor participation
  • Framework for enhanced settlement cycles in equity cash markets

Compliance Requirements

For Qualified Stock Brokers (QSBs):

  • Must eventually put in place necessary systems and processes for enabling seamless participation of investors in optional T+0 settlement cycle
  • QSBs meeting minimum active client parameters as of December 31, 2024 remain subject to these requirements
  • Revised implementation timeline to be announced later

For Market Infrastructure Institutions (Stock Exchanges, Clearing Corporations, Depositories):

  • Take necessary steps and implement systems for the above provisions
  • Make necessary amendments to byelaws, rules, and regulations as required
  • Bring provisions to the notice of market participants and investors
  • Disseminate circular on their websites

Important Dates

  • December 10, 2024: Original SEBI circular introducing enhanced T+0 settlement scope
  • December 31, 2024: Reference date for QSB qualification based on minimum active clients
  • May 1, 2025: Original implementation deadline (first timeline)
  • April 29, 2025: First extension circular issued
  • November 1, 2025: Second implementation deadline (now extended)
  • October 30, 2025: This circular issued
  • To Be Announced: New implementation deadline for QSB system readiness

Impact Assessment

Market Impact:

  • Limited Immediate Disruption: Since T+0 settlement remains optional and T+1 continues as standard, market operations are not disrupted
  • Delayed Innovation: Implementation of faster settlement infrastructure postponed, delaying potential benefits of same-day settlement for investors

Operational Impact:

  • QSB Relief: Provides additional time for brokers to develop and test required technological infrastructure
  • Industry Readiness Concerns: Repeated extensions indicate significant technical and operational challenges across the brokerage industry
  • Implementation Uncertainty: Lack of new fixed deadline creates planning challenges for QSBs and technology vendors

Investor Impact:

  • Neutral Short-term: Investors continue to operate under existing T+1 settlement framework
  • Delayed Access: Benefits of optional T+0 settlement (faster fund availability, reduced settlement risk) remain unavailable through QSBs not yet ready

Regulatory Considerations:

  • Demonstrates SEBI’s pragmatic approach to balancing innovation with industry preparedness
  • Extension acknowledges complexity of implementing real-time settlement infrastructure
  • Maintains long-term policy direction while accommodating implementation realities

Impact Justification

Affects Qualified Stock Brokers' implementation timeline for T+0 settlement infrastructure. Extension provides flexibility but indicates industry readiness challenges. No immediate market disruption as T+0 remains optional alongside existing T+1 cycle.