PSE migrates to shortened settlement cycle

MANILA, Philippines — The Philippine Stock Exchange Inc. (PSE) has successfully migrated to a shortened settlement cycle of T+2 or trade date plus two days from three days previously, a move seen to boost the Philippine capital market.

The shortened settlement period is also expected to align the country’s stock exchange to international markets such as the United States, most European Union member states and the major markets in the Asia-Pacific region, said PSE president and CEO Ramon Monzon.

Furthermore, the launch of the shortened T+2 settlement cycle will reduce various risks of unsettled trades under a T+3 regime and will promote more efficiencies in the Philippine capital market.

“Aside from aligning the settlement cycle with major international markets, we expect that market participants will soon experience the benefits of operating in a T+2 environment,” said Monzon, who concurrently serves as president and CEO of the Securities Clearing Corp. of the Philippines (SCCP).

The SCCP commenced preparations for the T+2 migration after the March 27, 2023 implementation of SCCP’s new system, which is now capable of accommodating any settlement cycle.

Monzon said  the shift to the new settlement cycle has been smooth.

On Aug. 29, 2023, SCCP settled two batches of trades where batch 1 comprised the last T+3 trades executed on Aug. 23 and batch 2 comprised the first T+2 trades which were executed on Aug. 24. All transactions were settled before their respective settlement deadlines, the PSE said.

Starting Sept. 12,  the settlement deadline will revert to the 12 noon regular deadline.