Key Takeaways
Shortening the stock settlement cycle from the current T+2 to T+1 lets investors get their sale proceeds in hand a day sooner, but for brokerages it could shrink the interest-like income they earned by deploying funds during the settlement waiting period. Since the policy's rationale is to overhaul a structure that benefits only brokerages, it may act as a profitability headwind for the securities industry sector. Conversely, the capital-market modernization effects — improved access for foreign investors and greater market efficiency — are a positive factor over the medium to long term.
What Happened
On the 23rd, President Lee Jae-myung said the government should pursue a plan to shorten the current clearing timeline — under which sale proceeds land in your account two days after you sell stock — to one day. Pointing out that the current structure benefits only brokerages, he signaled his intent to move up the timing of the reform, and the financial authorities are expected to lay out a concrete schedule and phasing in the form of an October roadmap.
Korea's stock market currently runs on a T+2 system, in which proceeds settle two days after a trade is executed. Reducing this to T+1 means proceeds are deposited the next day, counting from the trade date, speeding up the turnover of investors' funds. However, because the entire system — settlement infrastructure, foreign investors' currency-exchange and remittance procedures, and the bulk-settlement processing of funds and pension funds — must be overhauled, a phased transition is unavoidable.
Background and Context
The United States switched its settlement cycle from T+2 to T+1 in May 2024, and the global capital-market standard is shifting toward shortening. If Korea follows the same trend, foreign investors' settlement risk and unsettled exposure will decline, improving market access. This could be viewed favorably for discussions on inclusion in developed-market indices and for the environment for inflows of foreign capital. At the same time, a core argument for the policy is that a shorter settlement waiting period somewhat narrows the base of interest-like income brokerages earned by deploying customer deposits and settlement funds.
Impact on the Market and Stocks
- Large brokerages (Mirae Asset Securities, Samsung Securities, NH Investment & Securities) The base of interest-like income generated from deploying funds awaiting settlement could shrink, weighing on near-term profitability. That said, since core businesses such as brokerage and wealth management make up a large share, the absolute scale of the impact is likely to be limited.
- Brokerages with a high retail share (Kiwoom Securities) With a structure sensitive to retail trading value and deposit turnover, a key point to watch is whether the shortened settlement leads to changes in the deposit-management environment.
- Holding-company-type brokerages such as Korea Investment Holdings The path by which changes in the securities subsidiary's interest income flow through to consolidated earnings warrants review.
- Securities settlement and IT infrastructure Shortening the settlement cycle entails system overhauls and IT investment, a structure that could temporarily boost related financial-IT demand.
- KOSPI overall Improved foreign-investor access and reduced settlement risk are medium- to long-term favorable variables for market liquidity and the trading environment.
Investor Checkpoints
- In the roadmap to be announced in October, check the timing of full T+1 implementation and the scope of phased application. The sooner the implementation, the faster the change to brokerages' revenue structure.
- Check whether the financial authorities' detailed plan also addresses regulatory changes related to deposit usage-fee rates and management income.
- Track the share and trend of interest income in brokerages' quarterly earnings releases to gauge the actual strength of the impact.
- Judge the market-access improvement effect by whether measures to improve foreign investors' settlement and currency-exchange procedures are included.
Outlook
If the system is implemented smoothly, the capital-market modernization effects of faster fund turnover and improved foreign-investor access will come to the fore, and the shock to brokerages' core-business competitiveness may be limited. In the opposite scenario, system-transition costs, confusion during implementation, and reduced deposit-management income remain variables that could weigh on near-term earnings. Because sensitivity may vary stock by stock within the securities sector depending on the scale of the settlement-infrastructure overhaul and the strength of regulation, the specificity of the roadmap and the implementation schedule will be the key keys that determine direction.
Mirae Asset Securities by Real-Time Data
Mirae Asset Securities' latest closing price is 42,150 won (-8.57% vs. the previous day), and the signal light combining foreign and institutional investor supply-demand (order flow) with news and momentum is 🟡 Neutral · Wait-and-See. With positive and negative signals mixed, it is a zone to watch.
- ▲ Supply-demand continuity — Foreign investors net buyers for 8 consecutive days (+6.5 billion won)
- ▼ Trend alignment — Short- and medium-term downward alignment (intraday -8.6% · 1-week -17.8% · 1-month -36.6%)
- ▲ News flow — 7 positive catalysts vs. 1 negative catalyst — positive bias
Recent related news is favorable, with 7 positive catalysts and 1 negative catalyst.
※ Price and foreign/institutional supply-demand (order flow) data are provided by Korea Investment & Securities (KIS) and are as of the time of publication.
This article is content automatically summarized and analyzed based on the original news. View original (Maeil Business Newspaper, Securities)
