South Korea T+1 Settlement Timeline Draws Warning from Foreign Banks

The proposed South Korea T+1 settlement transition may be too rapid for international financial institutions to implement safely, according to foreign investment banks consulted by regulators.

South Korea is considering shortening its equity settlement cycle from two business days after execution to one, with an implementation period of only eight to nine months.

Foreign banks said comparable transitions generally require at least 18 months of preparation.

The Financial Services Commission is consulting global institutions on foreign-exchange arrangements, settlement procedures and implementation timing, while Deloitte Anjin is conducting a study scheduled for completion in December.

Banks said detailed system work could not begin until regulators clarified operational requirements.

They also highlighted limited automation and the complexity of cross-border transactions as significant risks.

Industry representatives warned that coordinated technology upgrades, market-wide testing and clear procedural guidance would be essential to prevent settlement failures and operational disruption.