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Foreign Investors May Be Exempted From Switch To T+1 Settlement Timetable In Taiwan

The Taiwan Brokers Association has urged the Taiwan Stock Exchange (TSE) to shorten the cash settlement timetable from T+2 to T+1. It says this will reduce settlement risk, but custodians fear it could create funding problems, especially for investors in

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The Taiwan Brokers Association has urged the Taiwan Stock Exchange (TSE) to shorten the cash settlement timetable from T+2 to T+1. It says this will reduce settlement risk, but custodians fear it could create funding problems, especially for investors in other time zones.

The TSE has responded by saying that the market will adopt a T+1 settlement cycle as soon as the Securities and Futures Commission (SFC) approves the idea.

Citibank officials in Taipei say that, in a recent meeting between custodians and SFC officials, it became clear that the regulator “understands the necessity for flexibility in the settlement cycle” for foreign investors. The SFC is considering exempting foreign institutional investors from the T+1 settlement requirement.

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