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After moving to trade-plus-one (T+1) settlement cycle, Securities and Exchange Board of India (SEBI) is now mulling at intra day settlement of transactions on stock exchanges, its Chairperson Madhabi Puri Buch said on Monday.
From January this year, India moved from T+2 settlement cycle to T+1 cycle in top listed securities, bringing operational efficiency, faster fund remittances, share delivery, and ease for stock market participants.
“Certainly, one of the things that we think is not very far off is the instantaneous settlement on the stock exchange. We are currently working on that. We are engaged with the ecosystem. We believe that in future we will have a mechanism which will facilitate instantaneous settlement of transactions on stock exchanges,” Buch told reporters.
She said the online depositories, technology stack and unified payment interface (UPI) facility give an opportunity for intraday settlement of trades.
“On instantaneous settlement, we need a little more work. If the ASBA (in secondary) market goes smoothly, then the next step is instantaneous settlement. I am not sure if this can happen this financial year, it may spill over to the next financial year,” Buch said.
In March this year, the capital market regulator approved a framework for Application Supported by Blocked Amount (ASBA)-like facility for trading in the secondary market. The framework would be implemented in a phased manner to facilitate smooth transition in the market.
Buch said the regulator is reviewing delisting regulations and insider trading plans.
Speaking on the delisting regulations, SEBI’s Whole Time Member Ashwani Bhatia said that an advisory committee, headed by Keki Mistry, former Vice-chairman and CEO of HDFC Ltd, has given its recommendations on the subject. He said these recommendations will be taken first to the advisory committees and later on it will be open for public discussions.
Delisting means removal of a listed security from a stock exchange. If a company wants to delist, it needs to buy back 90 per cent of its shares from the public.
“If you have a requirement for delisting, you can also have a fixed price,” Bhatia said.
Buch said a consultation paper on delisting norms may be released before December.
Further, SEBI’s Whole Time Member Ananth Narayan Gopalakrishnan said a committee of market experts of companies and legal experts has been set up which will look into making the implementation of the steering plan for insider trading a lot more user friendly.
“We are hoping that this committee will be making the recommendations pretty soon and by the end of August we should have a consultation paper out which will hopefully go a long way easing the implementation of the steering plan, thereafter the other regulatory changes, if necessary, can be brought in,” he said.
The SEBI Chairperson said the regulator is looking at an architectural shift to help industry implement its various circulars.
