T+2 Settlement

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26 November 2018 T+2 Implementation In

About T+2

T+2 Settlement Cycle (T+2) denote that the seller must deliver the purchased security and the buyer must make payment on the 2nd Exchange Day after the occurrence of the Exchange Transaction.

T+2 Video

Brief Explanation T+2

As technological developments have enabled more rapid communications and practices improvement adopted by various Stock Exchange globally, one of the recommendations for Capital Market Development is to shorten settlement cycle. Currently, various European, Asian, and American Stock Exchanges have gradually begun to reduce their settlement cycle from T+3 to T+2.

Benefits expected from T+2 are settlement process efficiency, aligning with leading global settlement practices, enhance liquidity in the Market, enabling capital to be freed up faster for reinvestment, and mitigate systemic risk.

Indonesia Stock Exchange Settlement Cycle

Indonesia Stock Exchange Settlement after T+2 effective as follows :

Benefit of T+2

  1. Settlement process efficiency
    T+2 encourages market player to streamlines their settlement process, and lower operational cost in the long run
  2. Aligning with leading global settlement practices
    Most of Global Exchanges from European, Asian, and American Market gradually begun to reduce their settlement cycle to T+2.
  3. Enhance liquidity in the Market
    With shorter settlement cycle, securities that investor purchased can be resold in less time.
  4. Enabling capital to be freed up faster for reinvestment
    With shorter settlement cycle, Seller will also receive funds one day sooner, realize gains faster, and it also make investor easier to switch investment to other securities.
  5. Reduction of counterparty and market risks
    The longer the settlement time, the greater the risk that both parties exposed. Shortening Settlement Cycle also will help to mitigate market risk and reduce risk exposure between transacting parties and the Clearing House itself.

 

Document

No Document Name Description Size(KB) Download
1. T+2 Announcement Official Announcement of T+2 Implementation Date (English Version) 583 Download
2. T+2 Market Participant Gathering Awareness to Market Participant 762 Download
3. T+2 Settlement Cycle Change T+2 Settlement Cycle Change Specification v. 1.1 87 Download
4. T+2 Working Group Meeting Road to T+2 Settlement Cycle 1.000 Download
5. Surat Himbauan Transaksi Selama Masa Transisi T+2 Pemberitahuan Mekanisme Perdagangan dan Penyelesaian Transaksi Bursa dalam Masa Transisi atas Implementasi Siklus Penyelesaian menjadi T+2 1.000 Download
6. T+2 Brochure T+2 Settlement Implementation 957 Download
7. T+2 FAQ Frequently Asked Questions 1.000 Download

Dokumentasi Kegiatan Siklus Penyelesaian T+2

Press Release

18 July 2018

Implementation of Stock Exchange Transaction Settlement Acceleration from T+3 to T+2

Jakarta Ð The advancement of technology and the growth of practice implemented by other Exchanges in the world recommend the capital market development by shortening the Stock Exchange transaction settlement cycle to T+2. In order to apply Global Best Practice, therefore Self Regulatory Organization consists of Indonesia Stock Exchange (IDX), Indonesia Clearance and Guarantee Corporation (KPEI), and Indonesia Central Securities Depository (KSEI), collaborated with Financial Services Authority (OJK), also supported by Exchange Members, Custodian Banks, Payment Banks, Bank of Indonesia, and other Market Players launched the implementation of T+2 Stock Exchange Transaction Settlement Cycle on Wednesday (18/7) in Main Hall IDX.

 

9 November 2018

Implementasi Percepatan Siklus Penyelesaian Transaksi Bursa dari T+3 ke T+2

Jakarta Sebagai tindak lanjut pencanangan rencana implementasi Percepatan Siklus Penyelesaian Transaksi Bursa dari T+3 ke T+2 oleh Self Regulatory Organization (SRO) yang terdiri dari PT Bursa Efek Indonesia (BEI), PT Kliring Penjaminan Efek Indonesia (KPEI), dan PT Kustodian Sentral Efek Indonesia (KSEI) pada 18 Juli 2018 lalu, SRO telah melakukan berbagai persiapan dengan melibatkan seluruh pelaku pasar modal. Dengan mempertimbangkan hasil assessment kesiapan seluruh aspek teknis maupun bisnis, serta hasil pengujian sistem di sisi SRO dan pelaku, maka dengan ini SRO mengumumkan bahwa implementasi T+2 akan berjalan sesuai dengan jadwal yang telah ditetapkan yaitu pada hari Senin, 26 November 2018 dengan penyelesaian transaksi hari pertama dengan siklus Penyelesaian T+2 akan jatuh pada hari Rabu, 28 November 2018.


FAQ

Q1 What is the Settlement Cycle?
Answer:

Settlement cycle is the period of time between the transaction date until the transaction is settled. After the transaction executed, the transaction must be settled in a way that the seller deliver the purchased security and the buyer make payment on this period, often referred to as T plus settlement cycle (T+).

Q2 How transaction settled in Indonesia Stock Exchange?
Answer:

Indonesia Stock Exchange Settlement Cycle can be illustrated as follows :

Currently, Settlement Cycle at Indonesia Stock Exchange differ from each of Market Board as follows :

Market

Settlement Cycle

Regular

On the 3rd Exchange Day after the occurrence of the Exchange Transaction (T+3)

Cash

On the same Exchange Day after the occurrence of the Exchange Transaction (T+0)

Negotiation

Based on the agreement between seller and buyer

 

Q3 What is T+2?
Answer:

T+2 Settlement Cycle (T+2) denote that the seller must deliver the purchased security and the buyer must make payment on the 2nd Exchange Day after the occurrence of the Exchange Transaction.

Q4 Why T+2?
Answer:

As technological developments have enabled more rapid communications and practices improvement adopted by various Stock Exchange globally, one of the recommendations for Capital Market Development is to shorten settlement cycle. Currently, various European, Asian, and American Stock Exchanges have gradually begun to reduce their settlement cycle from T+3 to T+2. Therefore, in order to implement Global Best Practices, Indonesia Stock Exchange has been considered to reduce its own settlement cycle to meet international standards.

Q5 What benefits are expected from T+2?
Answer:
  1. Settlement process efficiency
    T+2 encourages market player to streamlines their settlement process, and lower operational cost in the long run
  2. Aligning with leading global settlement practices
    Most of Global Exchanges from European, Asian, and American Market gradually begun to reduce their settlement cycle to T+2.
  3. Enhance liquidity in the Market
    With shorter settlement cycle, securities that investor purchased can be resold in less time.
  4. Enabling capital to be freed up faster for reinvestment
    With shorter settlement cycle, Seller will also receive funds one day sooner, realize gains faster, and it also make investor easier to switch investment to other securities.
  5. Reduction of counterparty and market risks
    The longer the settlement time, the greater the risk that both parties exposed. Shortening Settlement Cycle also will help to mitigate market risk and reduce risk exposure between transacting parties and the Clearing House itself.
Q6 Will Indonesia Stock Exchange shorten it settlement cycle to T+2 as well?
Answer:

Yes, T+2 will be implemented at Indonesia Stock Exchange on Monday, 26 November 2018 with details as follows :

Q7 How is settlement cycle for each market Board at Indonesia Stock Exchange after T+2 implemented?
Answer:

Change in Settlement Cycle for each market as follows:

Market Existing Settlement Cycle T+2 Settlement Cycle

Regular

T+3

T+2

Cash

T+0

T+0

Negotiation

By Negotiation, default T+3

By Negotiation, default T+2

Ê

Regular Market Settlement as follows :

Ê

Q8 What securities class in IDX are affected due to changes of T+2 settlement cycle
Answer:

Securities class affected by T+2 change as follows :

Securities Class

Existing Settlement Cycle

T+2 Settlement Cycle

Share

T+3

T+2

ETF

T+3

T+2

REITS

T+3

T+2

Warrant

T+3

T+2

Rights

T+0

T+0

Bonds

T+2

T+2

Futures

T+1

T+1

Options

T+1 for Premium

T+3 for Physical Exercise

T+1 for Premium

T+2 for Physical Exercise

Q9 How will the business process from transaction to settlement become after T+2 implemented?
Answer:

To avoid any potential settlement failure on settlement date specifically for Institutional Clients, we encourage Custodian Bank and Exchange Member to resolve pre settlement matching process no later than T+1.

Q10 How will T+2 impact your transactions?
Answer:
  1. Double settlement on first T+2 settlement date:

  2. Market participants on T+2 will now have one less day to complete the pre-settlement matching process compared to prior settlement cycle.

  3. Securities lending and borrowing request for settlement purpose should be submitted on T+1 to ensure availability of securities that can be borrowed.

Q11 How many/much shares or funds should I deliver on first T+2 settlement if I trade on the last day of T+3 and the first day of T+2?
Answer:

The transaction on last day of T+3 and first day of T+2 will be netted by KPEI as following illustration :

Q12Is there any other things that also need to be considered by market participants related to settlement mechanism during T+2 transition to avoid any potential failure risk?
Answer:

On the double settlement day, Clearing House (KPEI) will issue Clearing Result List that consist of transaction from last day of T+3 and first day of T+2 on net position for each Clearing Member.

Market participant should pay attention the availability of funds and securities that required on double settlement day as there will be potential increase in transaction volume and value that must be settled ranging from 1.5 to 2 times from daily average.

If the client buy and sell on both last day of T+3 and first day of T+2 through more than one Exchange Member (Clearing Member), the client will need to provide required funds and securities for each member separately and will not be settled on net basis.

Please also note that on the double settlement day (and also the usual settlement day), the cut off time for obligation of delivery to Clearing House (KPEI) is 12:15 hours while the funds and securities will be received 13:30 hours, so it will not be possible to fulfill obligation of delivery using the funds and securities that received on 13:30 hours on the same day.

The illustration can be seen as follows :

Q13 How will T+2 impact on Corporate Action Entitlement?
Answer:

Change in Cum and Ex Date in Regular Market of Corporate Action are as follows :

Q14 What about the agreement that has been made between the Securities Company and the Clients?
Answer:

Both Securities Company and Client is required to review and make adjustments on their contractual documents and existing agreements including, but not limited to, Opening Account documents, rights / obligations to receive funds and / or securities at the Trade Confirmation / Invoice, and Forced Sell / Buy in Margin and / or Shortsell facilities. Securities Company must inform any change of agreement to every of its Client by any means.

Q15 I have further questions related to T + 2
Answer:

You can send the question to :

T+2 Project Unit,
proyek.t2@idx.co.id for questions about exchange transaction

Equity Unit,
timt2kpei@kpei.co.id for questions about clearing and obligation of delivery

Transaction Settlement Unit,
t2.ksei@ksei.co.id for questions about settlement

Not sure which one? Send it to all of the emails.