Korea Exchange-trade settlement

SEOUL, Nov. 2 (Yonhap) -- The Korea Exchange (KRX) on Monday unveiled a plan to shorten a cycle for stock settlement, in what could be a major overhaul to improve efficiency for the equity market.

Since 1972, South Korea has adopted a stock settlement system that allows investors to settle their transactions two business days after their trades. Under the envisioned plan, investors would be allowed to settle their transactions one business day afterward, the KRX said in a statement.

Relevant authorities plan to complete building infrastructure to shorten the cycle for stock settlement by October 2027, it said. If things go smoothly, the shorter settlement system is likely to be implemented fully in 2028.

The plan is aimed at "advancing the settlement cycle by one day and reducing settlement risks in the securities market," the KRX stressed.

It added the change will enable "investors who sold stocks to receive the proceeds the following day" while reducing risks and workload by promoting industry automation and standardization, it said.

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