The Johannesburg Stock Exchange (JSE) has completed the second phase of its T+3 project, a move that will see the settlement cycle for South African equities cut by two days.
Currently the exchange has T+5 settlement cycle, however the move to T+3 will help align the South African market with the US equities market, and just one day behind Europe’s T+2 cycle.
The project is being implemented in three phases, with the first phase being completed last year. The completion of the second phase entailed the deployment of a new clearing system, the Equities Clearing System (ECS), as well as substantial changes to JSE’s existing systems.
“Apart from mitigating both systemic and settlement risk, the move to T+3 has numerous benefits for the market including attracting foreign investors by harmonising settlement with international standards and boosting liquidity as assets are released from the settlement process quicker,” said Leila Fourie, director of post-trade services and information services, JSE.
The exchange has said it will commence the implementation of phase three of the project in due course and will inform all market participants of its plans.