The Trinidad and Tobago Stock Exchange Ltd (TTSE) has announced amendments to its rules – No 212 and No 203 – effective April 15.
In a release on Friday, the TTSE said in accordance with Section 40(4) of the Securities Act Chapter 83:02, the rules have been revised to facilitate the implementation of a two-day (T+2) settlement period, which is more in line with international best practices and standards.
TTSE said in reference to rule 212 – trading and settlement period, the settlement of trades in equity and mutual fund securities will be reduced from three to two business days.
Consequently, rule 203 – ex-condition trading has been amended to specify that trades with a settlement period falling after the record date shall be executed ex-dividend in the case of equity securities or ex-distribution in the case of mutual funds.
"A shorter settlement period allows for a quicker availability of funds/cash and securities, which can promote liquidity in the market. Increased liquidity can attract more investors/trading activity and potentially lead to better price discovery," the release said.
TTSE added that a shorter settlement cycle will contribute to a more transparent and reliable market infrastructure, which can enhance investor confidence and attract more activity to the market.
Additionally, investors will have an extra day to trade before the record date to qualify for a dividend distribution.
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