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Industry Experts Discuss 'T+1' Settlement Cycle Shift for South Korean Stock Market
Finance · Investment Banks/Brokers · yonhap_finance · 2026-09-02
Market participants agree on the need to shorten the settlement cycle to T+1, but emphasize the importance of infrastructure readiness and sufficient time.
What Happened
Discussion on T+1 Settlement: A recent forum hosted by the Korea Financial Investment Association explored the transition to a T+1 settlement cycle. While participants acknowledged that shortening the cycle from T+2 would enhance capital efficiency and align with global standards, they stressed the need for careful implementation.
Benefits and Challenges: The shift would allow individual investors to access proceeds from stock sales one day earlier. However, the tighter deadline requires significant upgrades to back-office automation and risk management systems to prevent settlement failures.
Foreign Investor Considerations: Foreign institutional investors face unique challenges, including currency conversion and complex coordination between global custodians. Experts warned that rushing the transition could lead to increased costs and operational risks, necessitating a thorough testing period.
Future Implementation: The securities industry is calling for a well-prepared, phased approach to ensure market stability. The Korea Securities Depository plans to conduct extensive system testing and develop contingency plans to mitigate potential disruptions during the transition process.