The cut in settlement times for stock market transactions from D+3 to D+2, which will come into force on October 2, 2023, was announced on Tuesday at an information and exchange meeting on this project, organised at the headquarters of the Tunis Stock Exchange by the Financial Market Council, Tunisie Clearing and the BVMT. At present, securities traded on the Tunisian stock exchange are settled three working days after the trade date, i.e. D+3. The project to reduce the settlement/delivery deadline to D+2 is part of an effort to prevent systemic risk and comply with international standards. Most of the global financial centres have already switched to D+2 and are preparing for a transition to D+1. The switch is also aimed at speeding up the availability of liquidity on the market, said Tunis Stock Exchange Managing Director Bilel Sahnoun. “For more than a year, the various market structures (the Stock Exchange, Tunisie Clearing, stockbrokers, the BCT, etc.) have been preparing for this migration to D+2. “Test operations have been carried out and have confirmed that all market components are ready,” he pointed out. Tunisie Clearing Managing Director Maher Zouari recalled that this deadline had been shortened from D+5 to D+4 in 1999 and from D+4 to D+3 in 2003, underlining that the reduction of the settlement/delivery cycle to 2 days had been introduced following consultation with the market (CMF, BCT, AIB, BVMT, Tunisie Clearing). He added: “Settlement/delivery on D+2 will be applied to all transactions admitted to Tunisie Clearing’s settlement/delivery system, whether traded on the central market or outside the central market. Thus, the current scope impacted by D+2 includes equity securities and debt securities (bonds, Assimilable Treasury Bonds (BTA) and National Loan). Transactions negotiated over-the-counter (OTC) off-exchange are not affected by D+2 (settlement of auctions and transactions in Treasury securities, negotiable debt securities, repurchase agreements, etc.). He added that this changeover would be combined with a reduction in the deadline for updating owners’ registers to D+3 instead of D+5. Zouari indicated that the reduction of the securities settlement cycle to D+2 will offer several advantages, including harmonisation of the transaction settlement process with international practices, a reduction in counterparty, market and liquidity risks by lowering the number of pending settlements and the related replacement cost risk, a reduction in margin calls on the Market Guarantee Fund and consequently a reduction in the burden on stock market intermediaries and an increase in the automation of operational processes.
Source: Agence Tunis Afrique Presse