KLSE Deputy President II Ungku A. Razak Ungku A. Rahman said the shorter settlement period will bring Malaysia in line with international practice in global settlements.
"For industry participants, the shorter settlement period increases efficiency and cost effectiveness, whilst minimising settlement risks in line with international practice.
"For local retail and institutional investors, the shorter settlement period reduces risk and market exposure where the seller and buyer will receive payment and shares, earlier," he said at the media briefing on T+ 3 today (August 23).
The T+3 settlement period, targeted for implementation in December this year, has been developed after extensive consultations with industry participants, including stockbroking companies, custodian banks and the Securities Commission.
Ungku Razak said the successful implementation of the T+3 settlement will require close co-operation with all parties involved.
"Extensive testing and simulation exercise prior to the implementation of T+3 will ensure participants’ preparedness for the shorter settlement period to T+3.
"Thus brokers and custodian banks are encouraged to initiate the automation and streamlining of their trade and settlement back office processes in-line with T+3."
With the implementation of T+3, the KLSE will join bourses that are already compliant with international best practices of a T+3 settlement period.
