Indian regulators are exploring a non-disruptive approach to instant equity trade settlement. As it searches for methods to support ordinary Indian investors, the markets regulator for India announced on Monday that it would go on with a plan to allow equities market deals to be settled the same day, provided that there are no “serious objections” from market players.
India switched to a strategy in January where trades are finalized within one working day. According to a September article by Reuters, the SEBI now intends to introduce an option to allow settlements quickly by October 2024.
According to Reuters last month, offshore investors have opposed the Securities and Exchange Board of India’s (SEBI) decision to implement immediate settlement because they believe that two cycles will cause the system to become fragmented and increase trading costs.
Ananth Narayan, a full-time member of the Securities and Exchange Board of India (SEBI), stated on Monday that the regulator is “aware” that implementing the new settlement plan shouldn’t cause any market liquidity to be fragmented.
The Network Forum Asia in Mumbai is a forum for custodian banks and offshore investors. “Any framework for optional same-day settlement, which will be with adequate consultation, will have elements to ensure that any such concerns are adequately addressed,” Narayan stated.
“If there are serious objections, we will not do it, but we are presently exploring instant settlement in a non-disruptive manner,” he stated.
Narayan continued by saying that SEBI had established a working group under the direction of a former full-time SEBI member to simplify rules and the offshore fund registration process.
In a different statement, he stated that SEBI would continue to caution investors about the dangers associated with trading in the derivatives market since it is “cognizant” of the expanding breed of individual investors.
