Lee Jae-myung, the president, on the 23rd addressed government discussions to shorten the current stock market settlement method of "T+2" (actual funds are deposited two business days after the trade is executed) to "T+1," saying, "I hear people are saying the implementation timing is 'in the second half of next year,' but review whether that is really necessary." He called for overhauling the system so that the proceeds from a stock sale are deposited into the account the next day, and for moving up the implementation date.
Presiding over a Cabinet meeting combined with an emergency economic review meeting at the Blue House that day, the president said, "It currently takes two days to settle stock sale proceeds. It seems there is a discussion to move this up," and added the above. In response, Kim Yong-beom, the Blue House policy chief, said, "There are some technical difficulties, but we are looking for a solution."
Currently, the domestic stock market uses a "T+2" framework in which settlement is completed two days (two business days) after a transaction is executed. Investors have complained that they cannot immediately retrieve sale proceeds. Meanwhile, as major markets such as the United States shift to a "T+1" framework, the government and the Korea Exchange (KRX) are reviewing a plan to shorten the settlement period to one day. Recently, the Financial Services Commission said it would unveil a roadmap, including a shorter settlement cycle, in Oct.
The president said, "From the perspective of stock market participants, it may be hard to accept why it takes two days to get the money back after selling a stock in this day and age," and ordered each ministry to review ways to shorten the implementation timeline. He also said, "Securities firms seem to benefit quite a bit by using those funds in the meantime," and added, "There are aspects that are not justified, so I hope you will shorten (the settlement cycle and the implementation timing)."
Earlier, in a capital market stabilization meeting held at the Blue House in Mar., the president also pointed out this issue. The president said, "Regulatory Rationalization Committee Vice Chair Park Yong-jin sent me a message, saying, 'Why do you sell a stock today but get the money the day after tomorrow?'" and added, "I also thought, 'Why does it have to be that way?'" He continued, "It probably has something to do with the margin transaction system; if necessary, let's review it as an agenda item for adjustment."