Korea Exchange to Conduct On-Site Review for Shortening Stock Settlement Cycle to Next-Day Payment

Transition from Current T+2 to Future T+1 Settlement Cycle

The Korea Exchange will conduct an on-site review of advanced stock markets that have already implemented systems to accelerate cash deposits after stock sales.

The Korea Exchange announced on April 13 that, together with the Korea Securities Depository and the Korea Financial Investment Association, it plans to conduct a local inspection on shortening the stock market settlement cycle (T+1 settlement) in New York and London from April 27 to May 1.

The inspection team will discuss the T+1 settlement implementation process, bottlenecks, and risk mitigation strategies with supervisory authorities, key infrastructure institutions, and market participants' associations in the United States and Europe,

and plans to draw policy implications.

Previously, the United States implemented a shortened settlement cycle in May 2024, and the United Kingdom and the European Union (EU) are scheduled to introduce the system in October next year. In Korea, if an investor sells stocks today, payment is received two days later under the current T+2 settlement structure.

An official from the Korea Exchange explained, "This inspection is intended to directly observe the successful T+1 transition experience and know-how of the United States, analyze the implementation strategies of Europe, and review specific directions for the possible application of a shortened settlement cycle in our stock market."

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