The Securities and Exchange Commission of Pakistan (SECP) has commenced a consultation with stakeholders regarding the T+1 settlement cycle at the Pakistan Stock Exchange (PSX).
This consultation, which is expected to conclude following the Eid holidays, will concentrate on identifying the challenges of implementation and evaluating the effects of T+1 on liquidity, investor engagement, operational preparedness, and heightened capital requirements, as stated in the SECP press release.
It is important to note that the T+1 settlement represents a forward-thinking reform that aligns with global best practices.
Nevertheless, stakeholders have pointed out specific operational difficulties within the local context.
The limited banking hours during Ramzan and delays in cheque clearances have resulted in funding mismatches.
Furthermore, PSX market participants have observed that a one-day settlement cycle is more effective in a fully digitised environment, while in Pakistan, the dependence on cheque-based transactions and the current banking cut-off times do not fully correspond with the T+1 framework.
The aim of the consultation is to ensure that the reform is inclusive.
It will also assist in guaranteeing that any forthcoming decisions promote market stability and efficiency.
The SECP has also taken into account the feedback received from various stakeholders in recent weeks.
KSE-100 witnesses gains and losses
Earlier, the Pakistan Stock Exchange (PSX) experienced major volatility during intraday trading on Thursday, as the benchmark KSE-100 index swung between losses and gains before entering negative territory by midday.
Trading started on a subdued note, with selling pressure driving the market into the red right at the opening bell.
The KSE-100 index declined by 2,354 points to reach 153,503 in the initial minutes of trading, with turnover noted at slightly over 3.6 million shares.
Read more: PSX turns volatile after weak start as KSE-100 swings between gains and losses
