Thailand plans move to T+2 in Q1 2018

Source: Stock Exchange of Thailand

The Stock Exchange of Thailand (SET), along with stakeholders in capital market, plans to move to a two-day settlement cycle (T+2) to reduce operation costs and risks across industry as well as to be in line with global practices.

This new settlement cycle is planned to be launched in the first quarter of 2018.

SET President Kesara Manchusree said, “SET, securities firms, custodian and asset management companies, has been working to shorten its settlement cycle of securities trading to two business days (T+2) from currently three days (T+3) with an aim to reduce risks across industry and enhance our competitive edge as well as align our operational process with international practice which will support further globalization and connection with international counterparties. By reducing settlement cycle, stakeholders will benefit from efficiently reducing costs and minimizing the settlement risks by around 20% on average.”

“Benefits from moving toward T+2 will not only reduce the risks and cost for investors but will also be more convenient for investors regarding cross-border portfolio management as the major changes among leading exchanges such as in Asia, Europe, and the U.S. To ensure smooth transition, SET along with The Securities and Exchange Commission (SEC) and Bank of Thailand have worked together in order to adjust related regulations in parallel with the operational process preparation. From discussion with related parties, the preparation process should take almost 12 months, thus T+2 will be launched around Q1/2018.” added Kesara

The adoption of T+2 settlement will keep SET aligned with the current and upcoming leading settlement practices around the world, where the T+2 settlement has been and will be widely used.

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