The Thailand Securities Depository (TSD) plans to accelerate the clearing and settlement cycle by one day, from T+3 to T+2, by the third quarter of 2005.
The objective of shortening the settlement cycle is to improve the efficiency of the clearing cycle and strengthen its range of post-trade services for the Thai capital market, using international best practices and technology.
For foreign investors, existing rules requiring clearance through the Bank of Thailand remain an obstacle. TSD has raised this matter to the Bank of Thailand to allow foreign investors to purchase securities first and submit documentation later. Presently, foreign investors need to submit documentation up front.
The TSD plans to hold public hearings and educational campaigns ahead of the move to a shorter settlement cycle, which could potentially reduce clearing risks and raise efficiency by as much as eight times compared with the present cycle.