The transition to a trade date plus 2 business days (T+2) settlement cycle, which will be effective from 7 March 2016, will reduce corporate action timetables and provide for faster settlement.
Following consultation last year, ASX has confirmed that transition to T+2 settlement will be implemented effective Monday 7 March 2016. T+2 settlement is expected to deliver regulatory capital and margin savings for direct users of the settlement system, and provide for faster settlement of transactions for investors.
Transition to T+2 settlement impacts corporate action timetables (as contained in the ASX Listing Rules) including:
- minimum 4 business days' notice to ASX of a proposed record date (rule 3.20.2) – a reduction from 5 business days;
- minimum 3 business days' gap between record dates (rule 7.14) – a reduction from 4 business days;
- minimum 4 business days from security holder approval at a meeting to record date (rule 7.15) – a reduction from 5 business days;
- minimum 4 business days from provision of disclosure document/product disclosure document/information memorandum to record date (rule 7.17.2) – a reduction from 5 business days;
- reduction of the ex period from 3 business days to 2 business days and other consequential date changes to the timetables in Appendix 3A, Appendices 3A.1 - 3A.6, Appendix 6A and Appendix 7A; and
- change in the first settlement date for trades conducted on a deferred settlement basis to the first day of normal trading following the issue date + 2 business days (rule 19.12, various Appendices) - a reduction of one business day from the first day of normal trading following the issue date + 3 business days.
These changes will apply to any corporate action announced with a record date of 9 March 2016 or later. For corporate actions or quotation of new securities that include a deferred settlement trading period, the changes will apply to issue dates of 4 March 2016 or later.
The associated changes to the ASX Listing Rules, as outlined in the ASX Consultation Paper –Implementing a T+2 Settlement Cycle for the Cash Market: Draft Rule Amendments will also be effective 7 March 2016.
The ASX Online Forms for the announcement of certain corporate actions (including dividends) have already been amended to calculate the correct ex period based on the transition date, and the information text associated with certain timetable dates (eg record date) will also be updated on 7 March 2016.
ASX is managing a transition period until the week of 7 March 2016, and any corporate action announced that is impacted by the changes will be checked by ASX Operations and ASX Listings Compliance for compliance with the changes.
See also [email protected] Compliance Update dated 18 February 2016.