T+0 settlement means that the shares bought will be credited to the demat account on the same day.
Market regulator SEBI will introduce T+0 settlement on an optional basis starting March 28. The Chairperson Madhabi Puri said this at an interaction on the sidelines of an AMFI event in Mumbai. T+0 settlement essentially means settlement on the same day or instantaneous settlement.
Trade at the moment is on a T+1 basis. This will be existing along with the T+1 settlement cycle that’s already there in the secondary market. According to the SEBI Chief, the instantaneous settlement is aimed at “making our regulated markets competitive and offer investors the same set of advantages as others.” She was referring to other alternative investment options like crypto available to investors globally.
Small and Midcap Funds: Stress test disclosures by March 15
Referring to making the regulated markets more competitive and safer for investors, Buch also mentioned that a disclosure format aimed at stress testing the mutual funds will be out by March 15. In this every mutual fund will give disclosures about how the small and midcap numbers stack up. This will be mandatory.
According to her, “The purpose of stress testing is to assess the situation if there is an adverse environment. The biggest risk for MF schemes is that it is a daily redemption process… if there is a lot of redemption pressure, then under those circumstances, it is important to assess how many days it will take for each of these schemes to exit from the underlying portfolio.”
This will help investors understand and assess the risks involved in putting their money in midcap and small cap funds in an adverse/stress situation.
She reiterated that “There are sections of froth in the market, and it is not appropriate to keep the bubble building. Proactive steps need to be taken to ensure the bubble is not fuelled further.”
SME IPOs: SEBI working at greater disclosures
Referring to investor security and signs of manipulation in SME IPO space, “malpractices at IPO and trading stage is under consideration in SME section. SEBI us working on greater disclosures to enable greater information dissemination. It is also ensuring adequate and appropriate disclosures at the time of listing of SME IPOs and even exploring deploying AI usage in bringing greater transparency.”
The market regulator further noted that it has been closely monitoring potential price manipulation in case of some IPOs and looking to introduce disclosures at every step with respect to the SME IPO space.
