SEBI bond tokenisation pilot targets T+0 settlement, lower counterparty risk

For capital markets professionals, settlement risk is not an abstract concern—it is the operational and financial core of every trade. SEBI's tokenisation pilot, announced at the Global Fintech Fest 2026, signals the regulator's intent to compress the corporate bond settlement cycle to T+0, a shift that could cut counterparty and settlement risk while reshaping liquidity and collateral requirements for brokers, custodians, and institutional investors.

India's capital markets regulator has taken a concrete step toward modernising the country's corporate bond market infrastructure. Speaking exclusively to ANI on the sidelines of the Global Fintech Fest 2026 in Mumbai, Maninder Cheema, Executive Director of the Securities and Exchange Board of India (SEBI), confirmed that SEBI has started a pilot on bond tokenisation. Cheema said corporate bonds are well suited to being issued in the form of tokens, and the pilot will help explore how tokenisation can be applied to the bond market. Crucially, she framed the initiative as a move toward instant settlement: 'Tokenization is a step forward which moves us forward on the settlement side. It will help bring about instant settlement on T0 basis and reduce what is called settlement risk and counterparty risk.' The announcement was made on September 10, 2026, during the seventh edition of the Global Fintech Fest, which Cheema noted has become a platform for showcasing emerging technologies such as artificial intelligence, quantum technology, and cybersecurity.

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Speaking exclusively to ANI on the sidelines of the Global Fintech Fest 2026 in Mumbai, Maninder Cheema, Executive Director of the Securities and Exchange Board of India (SEBI), confirmed that SEBI has started a pilot on bond tokenisation.

The pilot is significant because it pairs a clearly defined market problem—delayed settlement and the associated credit and liquidity risks—with a technological solution that has long been discussed but rarely tested by regulators in South Asia. In traditional corporate bond settlement, a time gap between trade execution and final transfer exposes participants to the possibility that one side fails to deliver cash or securities. A T+0 model, if implemented effectively, would compress that window to zero, eliminating most intraday counterparty exposure. Cheema explicitly linked tokenisation to risk reduction, signalling that SEBI is not merely exploring the technology for its novelty but is evaluating it against specific market-structure goals. Bond tokenisation involves representing ownership or claims over bonds through digital tokens on a technological infrastructure. That digital representation, in principle, allows the ownership record and the transfer instruction to move together, making atomic settlement—where payment and security transfer happen simultaneously—more feasible. For corporate bonds, a market segment that can suffer from illiquidity and fragmented trading, any infrastructure that lowers settlement risk could encourage higher participation from both domestic and foreign investors.

Cheema also placed the tokenisation pilot in the context of fintech's earlier contributions to India's bond market. She noted that fintech has already made corporate bonds more accessible to retail investors through Online Bond Platform Providers, or OBPPs. This is an important detail: OBPPs have opened a door for individual investors to buy corporate debt without going through traditional institutional intermediaries. Tokenisation, Cheema suggested, represents the next step in that same technological trajectory, but with a different emphasis—settlement efficiency rather than just distribution access. The pilot could therefore be seen as part of a broader regulatory arc in which SEBI has been willing to adopt fintech tools where they can demonstrably improve market function. The regulatory tone is nonetheless cautious. Cheema was explicit that the initiative remains at the pilot stage and that broader rollout would depend on how the pilot progresses. 'We are at pilot stage. Let's see how it rolls out,' she said.