KSD: "Successful Implementation of Shortened Settlement Cycle in US Securities Market"

Weekday and Holiday Early Work System Activated
Payment Processing Support Provided on June 6, Memorial Day

Korea Securities Depository (KSD) has successfully and stably implemented the shortened settlement cycle in the U.S. securities market, which took effect on the 28th of last month.

Previously, in March of last year, the U.S. Securities and Exchange Commission (SEC) decided to shorten the settlement cycle in the U.S. securities market. As a result, from the transactions on May 28, the settlement cycle for U.S. securities, including exchange-traded funds (ETFs), was changed to a T+1 system, where settlement occurs the next business day after the trade date.

To ensure smooth T+1 settlements, KSD has been preparing for the shortened settlement cycle in cooperation with domestic securities firms and Citibank, the custodian institution in the U.S. securities market. In particular, to respond to the reduced working hours caused by the shortened settlement cycle, KSD operated an early work schedule on weekdays and holidays during the initial phase of T+1 settlement implementation, supporting T+1 settlements for 25 securities firms.

According to KSD, on the first settlement day under T+1 (May 29) for transactions made on May 28, the number of buy and sell settlement cases totaled 56,000, with a settlement amount of 2.3 billion dollars. Among the total settlement amounts combining buy and sell on the first T+1 trading day, NVIDIA had the highest amount.

KSD also worked on Saturday, June 1, to process same-day settlement approvals for transactions made on Friday, May 31. Same-day settlement approval refers to the regulation that trade confirmation, settlement data finalization, and approval must all be completed, requiring settlement instructions to be finalized by 9 p.m. U.S. time (by 10 a.m. the next day Korean time).

A KSD official explained, "Due to the time difference with the U.S. (13 hours during daylight saving time), same-day settlement approval work for Friday’s transactions inevitably requires settlement instructions on Saturday. To support this, we operated an early work schedule on weekdays and holidays during the initial phase of T+1 settlement implementation."

KSD plans to support U.S. market settlement operations on June 6 as well, which is a business day in the U.S.