We would like to share this important communication with you, as it aims to give you an overview of an important regulatory change on the JSE.
In order to make its settlement period consistent with global standards, from Monday 11 July 2016 the JSE will reduce the settlement period from the current trade day plus five days (commonly referred to as T+5) to the trading day plus three days (T+3).
This will affect all equity market trades.
What are the intended benefits of the move to a T+3 settlement?
In addition to improving the credibility of our local equities market, via an alignment with global best practice, the shortened settlement cycle will also unlock a number of operational benefits:
• Harmonisation across international markets – reducing complexities resulting from timing differences between trading jurisdictions with different settlement cycles;
• Increased liquidity – enabling faster reinvestment of assets that are released from the settlement process;
• A reduction in the number of outstanding unsettled trades;
• Reduced settlement exposure / credit risk and a reduction of systemic risk;
• Improve operational efficiencies
How will this impact your trading on the JSE Equity Market?
There will be very little impact on your trading account. We always require clients to have available cash for settlement in their trading account prior to entering an order. The main benefit is that you will receive your cash 2 days earlier when you sell.
Please contact the Trading Desk on 011 384 2920/1/2 if you have any queries.