‘Migration to T+2 will align PHL with main worldwide markets’

The Securities Clearing Company of the Philippines (SCCP), a wholly-owned subsidiary of the Philippine Inventory Alternate Inc. (PSE), has migrated to a shortened settlement cycle of two days of clearing after the transaction (T+2).

This migration is a major development within the home capital market and can align the Philippines with main worldwide markets comparable to the US, most European Union member states and the most important markets within the Asia-Pacific area, the PSE stated.

“We’re happy with the graceful transition to the shortened settlement cycle. We’re grateful to all market contributors for supporting this initiative,” stated PSE President and CEO Ramon S. Monzon, who additionally serves as president and CEO of SCCP.

Preparations for the T+2 migration commenced instantly after the March 27 implementation of SCCP’s new clearing and settlement system, which is able to accommodating any settlement cycle.

Market contributors, together with stockbrokers, custodian banks, the Philippine Depository and Belief Corp., inventory switch brokers, PSE’s issuer regulation division and the Capital Markets Integrity Corp. all took half in working group discussions, readiness actions and testing periods over a 5-month interval, to make sure that the market was prepared for a T+2 settlement cycle.

On August 10, the SCCP obtained the approval of the Securities and Alternate Fee for its request emigrate to the T+2 settlement cycle on August 24.

The PSE stated the launch of the shortened T+2 settlement cycle will cut back varied dangers of unsettled trades beneath a T+3 regime and can promote extra efficiencies in Philippine capital market.

“Apart from aligning the settlement cycle with main worldwide markets, we count on that market contributors will quickly expertise the advantages of working in a T+2 atmosphere,” Monzon stated.

On August 29, the SCCP settled two batches of trades the place the primary batch comprised of the final T+3 trades executed on August 23 and the second batch comprised of the primary T+2 trades which have been executed on August 24. All transactions have been settled earlier than their respective settlement deadlines.

Subsequent settlements till September 4 have been completed earlier than 1pm, the prolonged settlement deadline that’s in impact till September 11. Beginning September 12, the settlement deadline will revert to the 12noon common deadline.