What is the News ?

The Securities and Exchange Board of India (SEBI), which previously stated its intention to introduce real-time settlement of trades in July, is now considering implementing one-hour settlement of trades as the initial step.

Facts About:

In a one-hour settlement, when an investor sells a share, the money will be deposited into their account within an hour, and the buyer will have the shares in their demat account within an hour.

Trade settlement is a process that involves the transfer of funds and securities on the settlement date.

• It's considered complete when the purchased securities from a listed company are delivered to the buyer, and the seller receives the money.
• Previously, trade settlements followed the T+1 cycle, meaning they occurred within one day or 24 hours of the actual transactions.

This changed in January 2023 when India shifted to the T+1 settlement cycle, making it the second country globally, after China, to adopt this cycle for top-listed securities.