07 November 2017
Reporter: Drew Nicol

Japan earmarks Q2 2019 for T+2 settlement shift

Japan has unveiled a “tentative” timeline for its exchanges’ shift from a T+3 to T+2 settlement cycle, with eye towards Q2 2019.

The implementation date will be determined by the middle of 2018 and is susceptible to changes due to discussions with market participants and “other matters”.

In-scope exchanges include the Tokyo Stock Exchange, Osaka Exchange, Nagoya Stock Exchange, Fukuoka Stock Exchange, and the Sapporo Securities Exchange.

SBI Japannext and Chi-X Japan will also shorten their cycles in line with these exchanges.

This decision to shorten the cycle is based on a Japanese work group report on the possibility of a shorter settlement cycle published in June 2016.

In a statement on the initial timeline, the Japan Exchange Group said: “This decision was made in recognition of the urgency and importance of realising a secure and efficient securities settlement system for enhancing the international competitiveness of Japan’s securities market.”

It added: “The tentative implementation period is scheduled for April or May 2019, as described in the final report.”

A move to T+2 has the advantage of bringing Japan in line with the major US and EU markets, among others.

North American securities markets cut their settlement cycles from T+3 to T+2 on 5 September.

Affected securities include equities and corporate and municipal bonds, and unit investment trust (UIT) trades in the US, Canada and Mexico, Peru and Argentina.

The EU moved to a T+2 settlement cycle in 2014.

The transition aims to reducing operational and systemic risks by forcing securities through the market infrastructure quicker, thereby allowing counterparties to avoid trade failures.

More news
The latest news from Securities Lending Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Foreign investment in US down
19 February 2018 | Washington DC | Reporter: Brian Bollen
Official figures, released 15 February, by the US Department of the Treasury show a drop in foreign investment in the US in December
Minium, IBM and Promontory release joint white paper
19 February 2018 | London | Reporter: Jenna Lomax
The patchwork of outdated systems most firms use today is not fit for purpose, according to a white paper jointly released by Minium, IBM and Promontory
Euroclear reports strong 2017 operating performance
19 February 2018 | Brussels | Reporter: Jenna Lomax
The value of securities held for Euroclear clients was up 3 percent year-on-year, reaching a record €28.6 trillion for 2017
Ricky Maloney rejoins Eurex
19 February 2018 | London | Reporter: Jenna Lomax
He previously worked at Eurex from 2013 to 2016 as head of OTC clearing sales and relationship management
BoE release consultation on a new rule for central counterparties
16 February 2018 | London | Reporter: Jenna Lomax
BoE states that this proposed rule of written notice would “support the UK Government’s approach to the implementation of the EU Network and Information Systems Directive”
ASX sees 5.8 percent increase in collateral management activity
16 February 2018 | Sydney | Reporter: Jenna Lomax
The increase in the use of derivatives and OTC was due to a rise in futures trading, OTC clearing and collateral management activity
Citi’s agency lending sales chief departs
16 February 2018 | New York | Reporter: Drew Nicol
Citi’s Americas head of sales for it’s agency securities lending, collateral management, and separate account cash management businesses, Jeff Bonaldi, has left to pursue a number of entrepreneurial ventures