Sebi Responds to Misreports on T+0 System, Focuses on ASBA Facility's Role

On Wednesday, the capital markets regulator Sebi addressed media reports about making the T+0 system mandatory for all. The regulator clarified that these reports were incorrect, stating that Sebi's chief Madhabi Puri Buch was discussing the Application Supported by Blocked Amount (ASBA) facility, not the T+0 settlement cycle.

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At an NSE event on Tuesday, Sebi chairperson Madhabi Puri Buch released a report titled "Indian Capital Markets: Transformative Shifts Achieved through Technology and Reforms." The report highlighted a potential annual benefit of Rs 2,800 crore if ASBA for the secondary market were fully adopted by retail investors.

Clarification on ASBA Facility

The ASBA facility ensures that investors' funds are moved only when the allotment is completed. During the event, a question was raised about why the ASBA facility remains optional, preventing retail investors from accessing significant potential savings.

In response to this query, Buch mentioned that Sebi might propose to its board to make it mandatory for Qualified Stock Brokers to offer ASBA as an option to their clients. However, she stressed that the choice to use ASBA would still rest with the clients.

Misinterpretation by Media

Sebi's statement noted that some media outlets had erroneously reported this discussion as Sebi advocating for a mandatory T+0 system for everyone. The regulator reiterated that this was not the case and clarified its actual stance on the matter.

The regulator's statement aimed to correct the misinformation and ensure that the public understands Sebi's true intentions regarding the ASBA facility and its potential benefits for retail investors.

This clarification is crucial as it addresses the miscommunication and provides accurate information about Sebi's plans and discussions concerning market reforms and investor facilities.