The Securities Clearing Corporation of the Philippines (SCCP), a wholly-owned subsidiary of the Philippine Stock Exchange Inc. (PSE), announced that stock market transactions from Aug. 24, 2023 onwards will be settled after two clearing days instead of three.

This comes after the clearinghouse obtained approval from the Securities and Exchange Commission (SEC) to start implementing the T+2 settlement cycle on the said date. Currently, SCCP observes a T+3 settlement cycle.

“The successful roll out by SCCP of its new clearing and settlement infrastructure five months ago has led to this landmark development for our market. We expect the shortened settlement cycle to enhance operational efficiency and reduce risk,” PSE President and CEO Ramon S. Monzon said in a statement.

He noted that, “this initiative also aligns SCCP’s settlement cycle with financial markets overseas that are already implementing the T+2 settlement cycle.”

Since Aug. 28, Monday, has been declared a national holiday, trades on Aug. 24 will be settled on Aug. 29, Tuesday. That is the same settlement date for trades completed on Aug. 23, the last trading day under the T+3 cycle.

The SEC also approved a two-week transition period where the applicable settlement deadlines are extended by one hour from Aug. 29 to Sept. 11.

“I am optimistic that the compliance rate of clearing members on the delivery of securities and cash obligations will continue to be within the current range,” Monzon said. 

He added that, “I thank our market participants for their full cooperation and support in the ongoing preparations for the adoption of the T+2 settlement cycle.”

All transactions starting Sept. 12 shall be subject to the regular 12:00 noon settlement deadline. Applicable penalties for late settlement under the SCCP Rules shall apply.