The Securities Clearing Corporation of the Philippines, a wholly-owned subsidiary of the Philippine Stock Exchange Inc., said stock transactions from 24 August this year and onwards will be settled after two clearing days, from three days at present.
This comes after the clearinghouse obtained Securities and Exchange Commission approval to start implementing the T+2 settlement cycle.
“The successful roll out by SCCP of its new clearing and settlement infrastructure five months ago has led to this landmark development for the market. We expect the shortened settlement cycle to enhance operational efficiency and reduce risk,” PSE president and CEO Ramon S. Monzon said.
The initiative aligns SCCP’s settlement cycle with financial markets overseas already implementing the T+2 settlement cycle, Monzon added.
Since 28 August, which falls on a Monday, has been declared a national holiday, trades on 24 August will be settled on the 29th which is a Tuesday.
That is the same settlement date for trades completed on 23 August, the last trading day under the old T+3 cycle.
The SEC also approved a two-week transition period where the applicable settlement deadlines are extended by one hour from 29 August to 11 September.
“I am optimistic the compliance rate of clearing members on the delivery of securities and cash obligations will continue to be within the current range,” Monzon said.
All transactions starting 12 September are subject to the regular 12 noon settlement deadline. Applicable penalties for late settlement under the SCCP rules will apply, the PSE said.
