The Securities Clearing Corporation of the Philippines, or SCCP, a unit of the Philippine Stock Exchange Inc. which processes the sale of shares, successfully migrated to a shortened settlement cycle of T+2.
This migration is a significant advancement in the domestic capital market and will align the Philippines with major international markets such as the United States, most European Union member states and the major markets in the Asia-Pacific region.
Preparations for the T+2 migration commenced immediately after the 27 March 2023 implementation of SCCP's new clearing and settlement system, which can accommodate any settlement cycle.
Market participants, including stockbrokers, custodian banks, the Philippine Depository and Trust Corp, stock transfer agents, PSE's Issuer Regulation Division and the Capital Markets Integrity Corporation took part in working group discussions, readiness activities and testing sessions over five months to ensure that the market was ready for the new scheme.
SEC gives okay
On 10 August, SCCP received the approval of the Securities and Exchange Commission, or SEC, for its request to migrate to the T+2 settlement cycle.
"We are pleased with the smooth transition to the shortened settlement cycle. We are grateful to all market participants for supporting this initiative," PSE president and CEO Ramon Monzon, who concurrently serves as president and CEO of SCCP, said.
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 market efficiencies.
"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," Monzon added.