On the 19th, Vice Chair Park Yong-jin of the Presidential Commission on Regulatory Rationalization said, "Toss and Kakao are even offering services that advance stock settlement funds during the two-business-day settlement cycle and pocket interest to make money," adding, "It's an absurd situation where I have to borrow cash at a loss and even pay interest when it's my own money."
On Facebook that day, Vice Chair Park stated accordingly, "In the United States, Canada, China, and even India, the stock settlement cycle is 'T+1.' Why does Korea have to be 'T+2'?"
The domestic stock market operates on a system in which funds are settled two trading days (T+2) after the trade date (T). Accordingly, it takes two days from selling a stock to actually receiving the money. The securities industry explains that the 'T+2' method was arranged in consideration of the stability of stock trading and settlement safety.
Vice Chair Park said, "Yesterday (the 18th), the president presented the view of reviewing a shorter settlement cycle for stock transactions through a meeting on 'stabilization and normalization of the capital market,' and the chair of the exchange said they are preparing institutional improvements and would make changes to coincide with Europe's implementation in October next year," adding, "It is truly fortunate that it has been confirmed that meaningful institutional improvements will be made by the government."
He continued, "When buying stocks, my money goes out immediately, but when selling stocks, my money only comes into my pocket two days later, or as long as four to five days later—how strange," adding, "But despite the exchange chair's answer promising a shorter settlement cycle, questions remain."
Vice Chair Park emphasized, "The Korea Securities Depository and the exchange already formed a working group for shortening the settlement cycle last October, but as of today (the 19th), six months on, they are still drafting a plan," adding, "Why do we have to keep pace with Europe? Rather, shouldn't we shorten and change our own capital market settlement cycle to draw European investors to the Korean stock market?"
At the meeting on 'stabilization and normalization of the capital market' held the previous day, the president said, "Why is it that when you sell stocks today, you get the money the day after tomorrow? Back in the day, I also wondered, why does it have to be that way?" adding, "If necessary, how about reviewing it as one of the agenda items for adjustment?"
At the time, Korea Exchange (KRX) Chair Jung Eun-bo, who attended the meeting, answered, "We are currently working hard to shorten the settlement cycle to keep pace with Europe," adding, "We will closely monitor international trends and prepare so that clearing and settlement can be carried out preemptively."