Korea Exchange (KRX), Korea Securities Depository (KSD), and Korea Financial Investment Association said on the 13th that from the 27th to the 1st of next month they will conduct on-site due diligence in New York and London on shortening the stock market settlement cycle.
The visit was arranged to directly confirm the United States' experience and know-how with the transition to a T+1, or one-business-day, settlement system as major global markets make the shift and competition in capital market infrastructure intensifies, and to analyze Europe's implementation strategy.
After the visit, the exchange, the depository, and the association plan to review specific directions for pushing ahead with shortening the settlement cycle that can be applied to Korea's stock market.
They plan to discuss with U.S. and European regulators, key infrastructure institutions, and market participant associations the T+1 settlement implementation process, bottlenecks, and risk response strategies, and to draw policy implications.
In particular, executive-level officials from the exchange, the depository, and the association will directly lead the on-site due diligence in New York and London. Participants are expected to include Park Sang-uk, head of the clearing and settlement division at the exchange; Kim Jin-taek, head of the clearing and settlement department at the depository; and Cheon Seong-dae, head of the securities and futures division at the association.
In New York, they will hold in-depth discussions with DTCC, the infrastructure institution that played a key role in shortening the U.S. settlement cycle, the Securities Industry and Financial Markets Association (SIFMA), and custodian Citibank on the implementation process, success factors, and operational experience.
In London, they plan to analyze Europe's strategy through the Financial Conduct Authority (FCA), which announced a T+1 settlement roadmap last year and is driving the transition, the chair of the T+1 task force, infrastructure institution Euroclear, and investor associations AFME and ICMA.
The exchange, the depository, and the association plan to actively reflect global best practices and policy implications secured through the on-site due diligence in system design.
They also said they will work closely with the government, related institutions, and market participants to build an advanced settlement process that leads Asia.