SEBI to have 1-hour trade settlements by end of this fiscal before making it instantaneous

SEBI to introduce one-hour trade settlements by end of FY. Optional for investors, tech exists for one-hour cycle. ASBA-like facility for secondary markets by Jan. Regulator monitoring activities with help of state law enforcement. Aim to make trade settlements instantaneous.

Markets regulator SEBI will introduce one-hour trade settlements by the end of this fiscal, in the run up to making such processes instantaneous, a top official said on Tuesday.

Amid concerns raised by certain foreign portfolio investors on the shortening of the settlement cycles citing forex-related worries, the official made it clear that faster settlements are optional and investors can opt out.

Securities and Exchange Board of India (SEBI) has adopted a roadmap towards realising its aim of making trade settlements instantaneous, the official told reporters.

"From one day to one hour to instantaneous is the roadmap," the official said, adding one hour settlements are much quicker to implement than instantaneous.

The official said technology for one hour trade settlements already exists and the regulator is confident about the same, while the instantaneous settlements need more technology development.

At present, SEBI is thinking of rolling out the one hour trade settlement for all investors by March next year, and is looking at a time frame of 6-8 months more for the instantaneous settlements, the official said.

The Application Supported by Blocked Amount (ASBA)-like facility for secondary markets will start by January for all investors and it will take another couple of months for the one-hour cycle to set-in after that, the official said.