The Bombay Stock Exchange, (BSE), on January 16, 2025, issued a notification regarding the Additional Clarification on Custodian Transactions In T+0 Settlement Cycle.
The T+0 Settlement Mechanism allows for the settlement of trades on the same trading day, enhancing liquidity and reducing settlement risks in the equity cash market. SEBI and market infrastructure institutions (MIIs) have issued multiple circulars detailing the operational modalities, including introducing custodial participant (CP) codes and enabling custodians to handle family accounts. Key responsibilities include custodians maintaining audit trails for family accounts, trade confirmations at the CP code level, and ensuring settlements to end investors within the same day. Members executing trades must comply with early pay-in requirements using the blocking mechanism, with clearing corporations managing obligations and auto delivery-out instructions for incremental obligations.
The timeline for T+0 settlement includes stringent deadlines, such as trade confirmations by 2:45 PM and pay-in cutoffs for securities and funds by 3:30 PM and 4:00 PM, respectively. These updates aim to streamline the settlement process, provide operational clarity, and ensure a robust system for handling custodian trades and obligations. Members and custodians are advised to adhere strictly to the prescribed timelines and mechanisms, including the early pay-in and settlement processes, to ensure smooth implementation and compliance.
[Notification No. 20250116-54]
