Sept. 6 in New Delhi: With SEBI’s proposed one-hour transaction settlement, investors would get speedier settlement and faster cash in hand, according to A Balakrishnan, Executive Director of Geojit Financial Services.
We don’t see anything that would prevent Sebi from implementing its proposal to settle deals within an hour. When Clearing Corporations and Depositories are ready with the systems, it is quite implementable. Because of UPI’s success, near real-time settlement has gained support, he added.
Investors will get their payouts and receive their cash more quickly. Similar to a UPI, where transactions are promptly resolved. It would represent a huge improvement in the Indian stock market’s transparency and effectiveness by giving investors real-time access to their assets, which will further draw resident investors to our stock market, “he said.
The modification, according to Teamlease RegTech CEO and Co-Founder Rishi Agrawal, is excellent news for investors. Liquidity becomes accessible during the T+1 settlement cycle in a few days. This cycle will be further compressed by the hourly settlement, increasing the allure of capital market investments. The modification will also release a significant amount of brokers’ margin funds held with the clearing business.
However, this will have an impact on the important market players’ regulatory reporting responsibilities, including those of brokers, clearing firms, depository institutions, and fund houses. He mentioned they needed to change their technological systems from batch processing at the end of the day to hourly processing.
