Securities and Exchange Board of India, is undergoing transformative changes in response to evolving market dynamics. Traditionally, the stock market was limited to a select few, but recent years have witnessed a paradigm shift, especially with the surge in stock market engagement during the COVID-19 pandemic. An increasing number of individuals, including the youth, are actively investing in stocks to explore new opportunities for additional income.

In line with these changes and to streamline processes, SEBI has taken significant steps to expedite settlements. A notable shift occurred earlier this year when the settlement period for stock market transactions was reduced from T+2 (trade date plus two days) to T+1. This change aimed at faster and more efficient settlements.

SEBI Chairperson madhavi Puri Bach has disclosed further changes expected to be implemented from next year. The regulatory body is working towards achieving same-day settlements for stock market transactions by march 2024, a significant acceleration compared to the current T+1 settlement. This move is poised to enhance the efficiency of the stock market ecosystem.

Moreover, SEBI is contemplating the introduction of instant settlements, where transactions would be completed in real-time as soon as they are registered. This ambitious proposal is aimed at providing investors with quicker and more responsive settlement processes.

Acknowledging the transformative nature of these changes, SEBI is open to receiving suggestions and feedback on the concept of instant settlements. It is crucial for SEBI to strike a balance between innovation and the concerns of market participants. The plan is to introduce the new settlement system alongside the existing one, allowing investors to choose between the two based on their preferences. 

However, SEBI suggests that this option may be available for selected heavyweight products. In essence, the envisioned changes in stock market transactions over the next two years indicate a revolutionary shift towards more efficient, real-time settlement processes, reflecting SEBI's commitment to adapt to the changing dynamics of the market.

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