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SEBI-initiated T + 1 settlements happened smoothly . “ Investors – both foreign and local – have tuned themselves into the new norms . An interesting change is that some of the foreign investors , instead of repatriating funds , have maintained the funds in the country to reduce operational inefficiencies , FX costs and more importantly to be able to fund an opportunity in the shortest possible time .” India joined China on T + 1 – with the latter settling T + 0 for securities and T + 1 for cash . There ’ s little movement from other major markets – though a note from BNP Paribas stated that Hong Kong Exchanges and Clearing ( HKEX ) is a “ prospective front-runner ” as Stock Connect is T + 0 . However , Thailand and Taiwan are said to be engaged with regulators in moving towards shortening settlement cycles . For other Asian markets , it seems like it will be a ‘ wait and see ’ approach , a phrase used by Karen Webb , senior Manager , issuer services , securities and payments at the Australian Securities Exchange ( ASX ) recently . The exchange is currently engaging with stakeholders on a potential move to T + 1 to gain industry sentiment on a shortening of the settlement cycle within the country . Though ultimately a decision driven by regulators , the ASX said in June that it would survey business committee members for “ high level views ” with summarised feedback to be discussed in a July meeting . “ We ’ re really interested in seeing what the reasons are underpinning those changes – there ’ s a fair bit of work to do on the costs and benefits ,” Webb said , on a webinar hosted by the Australian Custodial Services Association . “ More recently we have included the discussion for T + 1 settlement on the business committee – our key industry forum for discussions on clearing and settlement – [ and ] if we were to make any recommendations to change to T + 1 , those recommendations would ultimately go to our clearing and settlement boards who would review from a number of perspectives and ultimately agree or not agree .” The consultation will also seek input on scope , with the move to T + 1 co-ordinated across equities and debt as well as its neighbouring country New Zealand . Australia moved to T + 2 in 2016 at a similar time to the US . We should also mention that the Philippines is intending to shorten its settlement cycle from T + 3 to T + 2 on 24 August 2023 . In March , The Securities Clearing Corporation of the Philippines , a subsidiary of The Philippine Stock Exchange , successfully transitioned its clearing and settlement system to the Millennium post-trade solution , therefore paving the way for a reduction in the settlement cycle . Outside of these regions the only other update we are aware of is that Nigeria is looking to move to T + 1 in the next few years . Plenty of questions and considerations remain for all these countries as global alignment and risk reduction is balanced with concerns over fail rates , funding requirements and operational changes . As associations like AFME have pointed out in the past , it ’ s not so much halving the time , it ’ s an 83 % reduction , with trade processes needing to take place on the same day . Therefore , it ’ s not just a case of follow the leader – but we can certainly expect the next five years or so to be filled with updates and announcements on settlement cycles from around the world .
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