Sebi is looking toward non-disruptive fast settlement: Authorized

 Sebi is looking toward non-disruptive fast settlement: Authorized

According to Reuters last month, offshore investors were opposing the Securities and Exchange Board of India's (SEBI) rapid settlement proposal because they believed that two settlement cycles would divide the market and drive up trading costs.

Sebi is looking toward non-disruptive fast settlement: Authorized

In response to "serious objections" from market players, India's markets regulator said on Monday that it would carry out a plan to permit the settlement of equities market deals within the same day in a non-disruptive manner.

According to Reuters last month, offshore investors were opposing the Securities and Exchange Board of India's (SEBI) rapid settlement proposal because they believed that two settlement cycles would divide the market and drive up trading costs.

In January, India made the switch to T+1 settlement, which settles deals in a single day. As an alternative, the SEBI now intends to permit instant settlement by October of next year.

Ananth Narayan, a Whole-Time Member of SEBI, said that the agency was concerned the change would cause liquidity to become more fragmented.

The Network conference Asia in Mumbai is a conference for offshore investors including custodian banks. "If there are serious reservations, we will not do it, but we are presently examining instant settlement in a non-disruptive manner," Narayan declared.

A source familiar with SEBI's thinking was cited by Reuters in a recent story on the regulator's belief that the quick settlement plan would help Indian retail investors and that it is striving to lower fragmentation risk.

Narayan went on to say that a working group led by a former full-time SEBI member had been established by SEBI to streamline rules and the offshore fund registration procedure.