Description

SEBI extends the deadline for Qualified Stock Brokers to implement necessary systems and processes for enabling investor participation in optional T+0 settlement cycle, with further guidance to be provided later.

Summary

SEBI has further extended the timeline for Qualified Stock Brokers (QSBs) to implement systems and processes for enabling investor participation in the optional T+0 settlement cycle. The original deadline of May 1, 2025 was previously extended to November 1, 2025, and has now been extended again with the new timeline to be communicated at a later date. This extension is based on challenges highlighted by QSBs in ensuring timely readiness of their systems.

Key Points

  • Timeline for mandatory implementation of T+0 settlement systems by QSBs has been extended beyond November 1, 2025
  • New timeline will be communicated through further guidance at a later date
  • Extension applies to QSBs who met the minimum number of active clients parameter as on December 31, 2024
  • The extension addresses challenges faced by QSBs in achieving system readiness
  • All other provisions of SEBI Circular dated December 10, 2024 remain unchanged
  • Optional T+0 settlement cycle continues to operate alongside existing T+1 settlement cycle

Regulatory Changes

This circular modifies the implementation timeline specified in:

  • SEBI Circular No. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2024/172 dated December 10, 2024 (original circular introducing enhanced scope of T+0 settlement)
  • SEBI Circular No. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2025/58 dated April 29, 2025 (first extension to November 1, 2025)

The extension specifically relates to paragraphs 3.3.1 and 6.2 of the December 10, 2024 circular, which required QSBs to put systems in place for enabling seamless investor participation in optional T+0 settlement.

Compliance Requirements

For Qualified Stock Brokers (QSBs):

  • Must continue working towards implementing necessary systems and processes for T+0 settlement
  • Should monitor for further guidance on the revised timeline
  • QSBs designated as such and meeting minimum active client parameters as on December 31, 2024 remain subject to this requirement

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

  • Take necessary steps and put in place systems for implementation
  • Make necessary amendments to relevant byelaws, rules and regulations
  • Bring provisions to notice of market participants and investors
  • Disseminate information 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 parameter
  • April 29, 2025: First extension circular issued, moving deadline to November 1, 2025
  • May 1, 2025: Original implementation deadline (now extended)
  • October 30, 2025: Current circular date providing further extension
  • November 1, 2025: Previously extended deadline (now further extended)
  • To be announced: New implementation deadline for QSB system readiness

Impact Assessment

Market Impact:

  • Delays the full-scale rollout of T+0 settlement capabilities across all qualified brokers
  • Provides relief to QSBs facing technical and operational challenges in system implementation
  • May slow down the adoption rate of T+0 settlement among retail investors
  • Ensures smoother implementation by avoiding rushed or incomplete system deployments

Operational Impact:

  • QSBs gain additional time to develop, test, and implement complex systems required for T+0 settlement
  • Reduces immediate pressure on broker technology teams and vendors
  • Allows for better coordination between brokers, exchanges, clearing corporations, and depositories
  • May impact investor expectations regarding availability of T+0 settlement options

Regulatory Significance:

  • Demonstrates regulatory flexibility in response to market participant feedback
  • Prioritizes robust implementation over strict adherence to deadlines
  • Maintains the overall policy direction towards faster settlement cycles while accommodating practical constraints
  • Does not affect the continued operation of optional T+0 settlement for brokers already equipped to offer it

Impact Justification

This circular significantly impacts all Qualified Stock Brokers by extending the implementation deadline for T+0 settlement systems. While it provides relief from immediate compliance, it affects market infrastructure modernization and investor participation in faster settlement cycles.