Thailand sets T+2 start date

The Stock Exchange of Thailand (SET) has revealed 2 March 2018 as the start date for its two-day settlement cycle.

The move will reduce the current cycle from three business days.

A reduced settlement cycle aims to reduce credit, market and liquidity risks and enhance efficiency of transactions.

SET said the move will also “make it more convenient for cross-border portfolio investment, keep it aligned with leading settlement practices and enhance the Thai capital market’s competitive edge.”

The move by SET follows attempts by other global markets to reduce the timespan of their settlement cycles.

Earlier this year, the Japan Securities Dealers Association revealed its intentions shorten the settlement cycle of Japanese Government Bonds from T+2 to T+1 on 1 May 2018.

In addition the Saudi Arabian Stock Exchange (Tadawul) published draft rules for the implementation of a T+2 settlement cycle with a targeted implementation date of Q2 2017.

“The target date to move toward T+2 settlement cycle, from the current T+3, has been extensively consulted with all stakeholders namely the Securities and Exchange Commission, Bank of Thailand, security firms, custodians, asset management firms and banks,” said Kesara Manchusree, president of SET.

“From now, all parties will work closely together in changing the related operational process and system development in conjunction with amendment of related rules and regulations in order to ensure smooth transition,” said Manchusree.