In a bid to expedite trade settlements, the Securities and Exchange Board of India (SEBI) is set to introduce a one-hour ‘trade’ settlement option by the end of the current financial year.
This move comes in response to concerns raised by some foreign portfolio investors regarding the shortening of the settlement cycle,
particularly related to foreign exchange implications.
Optional Fast Settlements
SEBI officials have clarified that the new fast settlement system will be optional.
Investors will have the flexibility to opt out of this expedited process if they choose to do so.
SEBI has diligently worked on a comprehensive framework to achieve its objective of faster trade settlements.
The plan involves reducing the settlement time from the current one day to just one hour initially, with further improvements planned beyond that.
While the technology required for a one-hour trade settlement already exists,
achieving even faster settlements will necessitate the deployment of more advanced technology.