KRX: Securities Settlement To Advance By One-hour

To enhance the settlement reliability and investors’ convenience, the Korea Exchange (“KRX”) advances payments and securities deliveries from the KRX to clearing members having receiving position in two stages. The first stage change, to be effective on July 5, 2010, allows payments and securities deliveries to begin at 15:00 hour, one hour earlier than the existing settlement deadline of 16:00 hour, and the second stage change, to be introduced in July 2011, allows payments and securities deliveries to begin at 09:00 hour.

Under the existing system, even if all clearing members have been completed the payments and securities deliveries to the KRX before the settlement deadline of 16:00 hour, the KRX does not begin the payments and securities deliveries until 16:00. Once the change becomes effective on July 5, 2010, the KRX will initiate the payments and securities deliveries for the receiving members eligible for the settlement from 15:00.

Since the amendment to be introduced allows for clearing members to receive the payments and securities earlier, i.e., before the settlement deadline of 16:00, it is expected that it would help to prevent the settlement delay and minimize the settlement uncertainty caused by settlements converging after the settlement deadline.

By allowing receiving the payments and securities early, it would assist the member securities companies and investors to manage or operate their assets more efficiently. Also, the efficiency of settlement between the member securities companies and investors, particularly the foreign investors would be enhanced. (KRX)