South Korea targets 2028 for T+1 stock settlement overhaul
- South Korea will adopt a T+1 settlement cycle by 2028, the first change in 54 years.
- The roadmap aims to provide 180 billion won in annual liquidity benefits to investors.
- Foreign investors, who hold nearly 39% of market cap, expressed concerns over the tight timeline.
- Infrastructure upgrades include linking with the U.S. DTCC system to streamline settlement steps.
- Authorities are accepting market feedback on the draft proposal until 18 December 2026.
South Korea’s financial authorities announced a draft roadmap on 2 November 2026 to transition the national stock market to a T+1 settlement cycle by 2028. This shift marks the first adjustment to the settlement system in 54 years, following the introduction of the T+2 cycle in 1972.
The proposed timeline provides approximately 2.1 years from the current announcement to the 2028 implementation date. This preparation period is shorter than the 2.5 years taken by the United States and the 2.7 years allocated by the United Kingdom. The schedule represents a delay of more than one year compared to previous discussions regarding an October 2027 launch.
Investors to gain 180 billion won in annual liquidity
Conversely, buyers of securities will be required to pay one day earlier than under the existing T+2 system.
This calculation assumes a 5 per cent annual interest rate and is based on average daily trading values recorded in the first half of 2026.
New deadlines for settlement approval will also take effect under the draft roadmap.
Global alignment and foreign investor concerns
The roadmap responds to a global shift toward shorter settlement cycles, with the United States having implemented T+1 in May 2024.
Foreign investors represent 38.9 per cent of the South Korean stock market’s total capitalisation and 24.7 per cent of its trading value. These participants face reduced working hours due to time-zone differences with major markets in the United States and Europe.
Infrastructure upgrades and development timeline
The institutions have established 22 detailed tasks across eight areas to support the transition. These tasks include building clearing and settlement infrastructure and preparing foundations for the industry and foreign investors.
Industry-specific work standards and implementation checklists will be distributed to institutions next month. In the first quarter of 2027, a task force of related agencies and a dedicated project-management office will launch to manage development and testing schedules.
The clearing and settlement infrastructure changes must be completed by October 2027.
At least six months of integrated testing must occur before the official switch in 2028. The Korea Securities Depository will link its system with the U.S. Depository Trust & Clearing Corporation's Central Trade Matching system to streamline the foreign settlement process from 12 steps to five.
Adjustments to market products and trading rules
This process allows for the lifting of withdrawal restrictions on portions that have already settled.
In the first half of 2027, the market will allow the installment payment of stock settlement funds.
Investors using margin loans will face a new deadline of T+1 to pay unsettled amounts, down from T+2.
Lowering interest burdens for stock investors
Firms then offer these funds to investors as mid-to-low interest sale proceeds loans.
As of the end of June 2026, these products carried annual interest rates between 7.5% and 10%.
Mirae Asset Securities launched the lower-rate product on 2 November 2026, followed by Kiwoom Securities on 20 November 2026.
Maintaining market stability and feedback process
An automatic stock-lending system is also currently under review to further bolster market stability.
The same official stated that market participants' opinions will be gathered until this date, after which a detailed schedule will be fleshed out through consultations with related agencies.
Frequently Asked Questions
- South Korea's Stock Market to Adopt T+1 Settlement in 2028, First Overhaul in 54 Years (finance.biggo.com)
- Korea Targets 2028 Shift to T+1 Stock Settlement (en.sedaily.com)
- List of countries by stock market capitalization (Wikipedia — background) (en.wikipedia.org)
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