Beta version of T+0 settlement to be launched today: All you need to know

economictimes.indiatimes.com:

What is the T+0 settlement?

In the T+0 system (T refers to the day of the trade and 0 is the day of settlement), trades done in shares will be settled on the same day. This means shares will be transferred to the buyer's account and the funds will be deposited in the seller's account on the same day of the trade. Currently, India follows the T+1 cycle, which means trades are settled by the next day.

What is the 'beta' version of the shorter settlement cycle?
It is a pilot project under which exchanges will launch the system on an optional basis in addition to the existing T+1 settlement cycle in the cash market. This means both settlement cycles will co-exist. The same-day settlement will be available only for 25 stocks and only a limited number of brokers can offer this facility. Additionally, the trading session for T+0 stocks will be from 9:15 AM to 1:30 PM.

How does the new system help investors and traders?
A shorter settlement cycle on full implementation is aimed at making the system more dynamic. Since funds will be available on the same day of selling, it is expected to improve liquidity, allowing traders to use cash better. «One of the biggest successes of the T+0 system for retail traders will be if they receive funds on the same day and are available for the next day's trading,» said Jimeet Modi, founder of Samco Securities. Brokers said even in the current T+1 settlement, there have been various instances of investors receiving funds late, beating the purpose of a shorter cycle.

What does this mean