Govt may cut share settlement time gradually

The government, in today’s proposed budget, is expected to announce a gradual reduction in share trading settlement time in the stock market, aiming to enhance market liquidity.

Settlement will be brought down from the current T+2 to T+0 in phases.

Under the T+2 system, funds and securities are settled two business days after the trade date — a Sunday trade, for example, settles on Tuesday.

The Bangladesh Securities and Exchange Commission had previously shortened the cycle from T+3 to T+2 in 2014, as part of reforms to streamline stock transactions.

Under T+0 settlement, trades would be executed and settled on the same day.

Repatriation of profit for foreign investors, and sale proceeds of shares bought through non-resident investor taka accounts, will be executable within one working day.

The government may also announce that the initial public offering (IPO) process will be digitalised and time-bound.

A digital platform would be launched to share information among issuer companies, issue managers, stock exchanges, CDBL, and the regulatory body.

The government will also study the potential of regional dual listing for local companies.