Instant trade settlement: How will it impact day traders?

economictimes.indiatimes.com:

trade settlement cycle is the period within which securities are delivered and funds are transferred after a trade is executed between a buyer and a seller. Obviously, an efficient settlement cycle enables quick ownership transfer and availability of funds.

A faster settlement therefore enhances liquidity in the market and is better for all stakeholders.

A few decades ago, our equity settlements and delivery system took at least 30 days and sometimes even several months. Over time, the settlement cycle was gradually made more efficient and came down to T+2 days.

This brought India at par with the rest of the developed world in terms of efficiency of capital markets. In another major step, in 2021, SEBI announced a move towards T+1 day settlement which not only better aligns India to the global trends, but in fact is amongst the best in the world.

Now, as the full implementation of T+1 settlement across all scrips is rolled out wholly by October 1, 2023, the SEBI Chairperson has communicated about an intended move towards real-time settlement.

In her press briefing in the month of July earlier this year, she mentioned that “One of the things that we think is not very far off is an instantaneous settlement on the stock exchanges. We are currently working on that; we are engaged with the ecosystem, and we believe that not in the very far future we will have a mechanism which will facilitate instantaneous settlement of transactions on the stock exchange.

Our markets moved from T+2 to T+1 but the technology stack that we have makes it possible to bring in a mechanism wherein trades can be settled instantaneously with entities getting money and the securities. We believe that in cash equity segment where T+1 exists, instant