What happened to all the T+0 excitement?

In today’s episode on 7th November 2025, we tell you why SEBI has indefinitely extended the deadline for stockbrokers to be fully ready for T+0 settlements. If you haven't already, get your free, personalized insurance advice ⁠⁠⁠⁠⁠by clicking here⁠⁠⁠.

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  Hello folks, you're tuned in Different Shots Daily and in today's episode, we tell you why Sebi has indefinitely extended the deadline for stock brokers to be fully ready for T+0 settlements.

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  But before we begin, here's a quick note from our co-founder. "When he started Film Shots, our aim was to make finance simple and accessible for everyone. Soon, we realized that understanding finance is just one of the challenges. Making smart decisions, especially around insurance, is a whole different ballgame. That's why we built Ditto, a platform that makes insurance simple. No jargon, no spam, just honest advice from advisors who are only here to help you find the right plan. So, if you haven't already, go get your free personalized health insurance advice by clicking the link in the description." Alright, now on to today's story. If you even vaguely remember, two years ago, we'd actually spoken about the market regulator Sebi's

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  big plan to shake up how stock market trades are settled by introducing something called T+0. For the uninitiated, when you buy or sell a stock, the trade doesn't wrap up instantly. Sure, your DMAT account shows the money you owe or are supposed to receive right away, but the actual funds and shares move only the next day. That's what we call a T+1 settlement, where T is the day you make the trade and plus 1 is the following day when the transaction is completed. T+0, on the other hand, promised to make this process lightning fast when trades settle the same day, all wrapped up by 4:30pm. Sebi had launched this neat sounding plan on a pilot basis, starting with just 25 stocks in March last year

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  and then gradually expanding the list by 500 stocks in phases of 100 stocks each month from Jan this year. The idea was that by May 2025, most brokers would be ready for a full T+0 rollout. But as it turns out, switching to a same-day settlement system isn't exactly plug-and-play. The deadline had to be pushed to November 2025 and now even that's off the table. Many brokers still aren't ready with the tech and systems needed for instance settlements. So, SEBI has decided to indefinitely extend the deadline, saying it'll announce a new one later. So, what happened to all the excitement around T plus zero? And why are brokers asking for more time to switch, you ask?

• 2:24Speaker 00

  Well, the reason goes a little deeper than just the surface level operational difficulties that everyone talks about. And to understand what's really going on, we need to look at a first of its kind study published in Economics and Political Weekly. The paper examined the potential impact of T plus zero settlements after the first few phases were rolled out. It tested if fastest settlements really improve market efficiency and liquidity as analysts believed. The logic was that when trades settle quicker, the bid-ask spread or the tiny gap between buying and selling prices tends to shrink. That's because market makers, the folks who constantly buy and sell stocks, face less risk of the other side not delivering cash or shares or prices changing before a trade is completed.

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  Less risk means tighter spreads and better prices for investors. The researchers looked at two phases. March 2024, when 25 stocks moved a T plus zero. And Jan 2025, when another 100 out of 500 additional stocks followed and used two methods. Number one, an event study which looked at how stock prices and trading volumes behaved around the days T plus zero was introduced. And number two, a DID approach, not dancing your dance but a difference in difference. Which compared how things changed for T plus zero stocks versus similar ones that stayed on T plus one. And what they found was actually pretty interesting. There was early excitement when T plus zero went live, but it faded quickly.

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  And there wasn't any lasting improvement in pricing efficiency or trading activity. In short, fastest settlement didn't really make the market more liquid, at least not yet. Okay, fun shots. So, why didn't this happen? You see, for starters, T plus zero really benefits active traders, not long-term investors. So, if you're someone who buys a stock and holds it for years, it doesn't really matter whether the shares reach your Dmat account in one day or a few hours. And that's an important point because in India, most investors are traders. They're long-term participants. Yes, NSE's MD and CEO, Ashish Kumar Chauhan, says only a small fraction actively trade or deal in derivatives. And a survey by Research and Ranking backs this up.

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  About three out of every five investors, that's roughly 60%, plan to hold their investments for at least three years. So, if the majority of the market doesn't really need faster settlement, the demand for T plus zero was bound to be limited, right? Then you have to look at the other side, the brokers. For them, moving to T plus zero isn't as easy as flipping a switch. It's an expensive upgrade. Under T plus one, if you trade today, say on a Friday, the exchange doesn't settle it immediately. Everyone gets a full working day until Monday to sort things out. Buyers move money to their broker, sellers transfer shares from their Dmat, and brokers reconcile everything before sending it to the exchanges.

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  But with T plus zero, money, shares, and confirmations all have to move within a few hours on the same day. That demands real-time coordination, better infrastructure, and stronger backend systems,

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  which translates into higher costs. All that would also mean that brokers charge a small premium for T plus zero, which could come up to an average of about 10 to 20 rupees extra per order. But when that cost is passed on to investors, two things happen. First, if you're a cost-conscious investor who doesn't trade often, you might feel the faster settlement isn't worth the extra money. You'd rather save that fee since you don't need instant credit or delivery anyway. Second is if a lot of investors feel that way, fewer people end up using T plus zero. And when participation stays low, trading volumes remain thin. That means brokers don't get the extra liquidity they were hoping for in the first place,

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  which makes the whole exercise less profitable. The proof is in the pudding. According to the Hindu Business Line, nearly a year after T+0 was introduced, the NSE and BSE have seen just 83 and 56 trades respectively worth only 7.1 lakh rupees and 3 lakh rupees in total. Now that's tiny. And these low numbers raise an important question. Is it really worth the investment for brokers to upgrade their systems for T+0? After all, it's still optional and with such low trading volumes, the returns on that added investment seem uncertain. So, brokers find themselves in a cost-benefit dilemma. Spend more to enable same-day settlement or hold off until there's enough demand to

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  make it worthwhile. So, it's a bit of a vicious cycle really. In summary, brokers aren't fully ready operationally and many remain skeptical about whether T+0 is worth the trouble. Because of that, the benefits of same-day settlement don't quite show up. And since those benefits aren't visible, there are few-takers. With few-takers, it doesn't make much business sense for brokers to invest heavily in it either. Round and round it goes. So, yes, we won't truly know how efficient T+0 can be until it's mandatorily rolled out across all stocks. But that again is easier said than done. No market in the world has gone fully T+0 yet. Not even the most advanced ones. And there's a good reason for that.

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  It's practically impossible for foreign investors. Same-day settlement means all trades must be pre-funded, money has to be in place before trading begins. For global institutional investors, that's a logistical nightmare. Time zones, currency conversions and cross-border transfers make it nearly impossible. Compressing all that into a few hours just doesn't work. It would not only disrupt FBI, that's Foreign Portfolio Investor Participation, but also hurt liquidity and push up transaction costs even more. That said, T+0 isn't dead. It's probably just waiting for its moment. And knowing Sebi's track record with market reforms, it'll probably come up with some clever workaround to solve this never-ending puzzle.

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  I'll see you in the next one. Thank you for listening to today's episode. And if you want to share your feedback or suggestions, do drop us an email to [email protected]. Until next time.