NCCPL mulls T+1 settlement

KARACHI: The National Clearing Company of Pakistan (NCCPL) has asked market participants to share their views and recommendations on moving to a shorter settlement cycle of one day after trade (T+1) from the current two days (T+2).

The NCCPL said the transition to T+1 would enhance the efficiency of the securities market operations and align them with the best practices of regional and global capital markets.

However, the NCCPL said it had not received feedback from the majority of the stakeholders and urged them to cooperate in highlighting and resolving any potential challenges that could hamper the implementation of the shorter settlement cycle.

The NCCPL said it was confident that it could handle the transition smoothly at its end, but it needed close coordination and collaboration with all concerned parties to ensure a swift and smooth transition.

The NCCPL said it had reached out to a limited audience through different forums to gather information on the perceived impact of the transition to T+1 and identified various issues that needed to be addressed, such as the time available for non-exchange transaction affirmation process, the operating hours of leverage markets, and the mark-to-market loss collection and disbursement for ready and derivative contracts.

The NCCPL said it had also conducted an awareness session on the T+1 settlement cycle on Jan. 15 at the Pakistan Stock Exchange (PSX) auditorium and planned to hold separate sessions with foreign custodian banks.

The NCCPL said the transition to T+1 would demonstrate its strong commitment and capability to adapt to the ever-transforming global service benchmarks for foreign investors and securities markets. The NCCPL said it intended to initiate a pilot run of the T+1 settlement cycle by April 15 and asked the stakeholders to adhere to the prescribed timeline.