Business · Markets · 17 hrs ago
South Korea aims to move stock settlement to one day by 2028
South Korea plans to move stock settlement to one day by 2028, according to a draft roadmap from four financial institutions.
The market currently uses a two-trading-day settlement system, so money from a stock sale usually takes two trading days to become available.
Under the proposed change, someone who sells shares on Monday could withdraw the money on Tuesday, and the plan also covers ETFs and ETNs.
Buyers would also need to pay a day sooner, so investors using credit to buy shares may face earlier deadlines and a greater risk of forced sales.
The change could make it easier to access cash, while a planned reduction in rates on loans secured by unsettled sale proceeds could also lower borrowing costs.
Financial firms must update systems and test them before the switch, which is targeted for 2028 after at least six months of integrated testing.
The final start date will be decided later, with preparations needed for overseas investors and coordination with other markets.
South Korea aims to move its stock-market settlement cycle from two trading days to one by 2028.
The change would allow investors to access money from a stock sale one trading day earlier.
Four securities-related institutions published a draft roadmap for the change on November 2.
The institutions plan to upgrade key infrastructure by October 2027, followed by financial firms’ system work and at least six months of testing.
Some foreign financial firms said they might reduce their investment in South Korea if the transition happens without enough preparation.
- Who
- The Korea Exchange, Korea Securities Depository, Korea Securities Finance Corporation and Korea Financial Investment Association are preparing the change.
- What
- South Korea plans to shorten stock settlement from T+2 to T+1, with a target of 2028.
- When
- The target is 2028. The draft roadmap was published on November 2.
- Where
- South Korea’s securities market.
- Why
- To let investors access money from stock sales one trading day earlier.
This story does not have two clearly opposing sides.
The United States began using a one-day stock settlement cycle.
Four South Korean securities-related institutions published a draft roadmap for shortening settlement to one day.
The institutions plan to complete upgrades to key settlement infrastructure.
Financial firms plan to finish developing their systems.
The institutions plan to conduct at least six months of integrated testing before confirming the final start date.
- Current settlement cycle
- T+2, or two trading days after a trade
- Planned settlement cycle
- T+1, or one trading day after a trade
- Target year
- 2028
- Institutions behind draft roadmap
- Korea Exchange; Korea Securities Depository; Korea Securities Finance Corporation; Korea Financial Investment Association
- Foreign-firm survey
- 7 of 32 firms said they might reduce their investment in South Korea if the transition lacked adequate preparation
What people are saying
I welcome being able to receive the proceeds even one day sooner after selling shares