Stock trades to be settled in 1 hour from March 2024

In a little more than a year from now, investors in the Indian stock market could get their trades settled instantaneously, the first country to achieve such a feat globally. As a precursor, the market would move to a one-hour settlement cycle around March, a Sebi source said.

The faster settlement cycle, however, will be optional for stock market investors since some institutions have raised concerns about shorter settlement cycles.

Currently, the Indian market operates on a T+1 cycle. Shares bought reflect in the demat account the next day. Ditto proceeds of stock sales in the bank account.

“From January 2024, the Indian market would move to an ASBA-like trading cycle, and in about 2-3 months after that, we would move to a one-hour settlement cycle,” a Sebi source said.

“We are ready with the technology that would power the one-hour settlement cycle. An instantaneous settlement cycle could take some more time,” since the regulator is currently working on the trading system that would power instantaneous settlements.