Pakistan’s capital market, under the supervision of the Securities and Exchange Commission of Pakistan, is entering a new phase of transition to the T+1 settlement cycle (effective from 9th February 2026), where trades will be settled on the next business day instead of two business days. This reform places Pakistan alongside global markets adopting faster, safer, and more efficient settlement systems, reflecting SECP’s broader policy agenda to modernize capital markets, reduce systemic risk, and align with international best practices.
The journey to T+1 settlement began globally with leading markets such as the United States, Canada, Mexico, Argentina, Jamaica, and China, all of which successfully implemented shorter settlement cycles, setting benchmarks for efficiency and risk reduction. Europe, the UK, and Switzerland have also announced their transition to T+1 by 2027, reflecting the global momentum toward accelerated settlement. The transition of Pakistan’s capital market to T+1 demonstrates its commitment to modernization and positions it ahead of several advanced markets in adopting this change.
The transition to T+1 is being executed through a structured and welltested approach. Capital Market Participants including PSX, NCCPL, CDC, PSBA, MUFAP, securities brokers, custodian clearing members, asset management companies, settling banks, EClear, and other nonbroker clearing members have conducted extensive system testing and mock sessions. Awareness campaigns and stakeholder engagements are also being rolled out to ensure that all stakeholders are fully prepared for the shift.
The move to T+1 offers advantages for the entire market:
• Faster access to funds and securities, improving liquidity
• Reduced settlement and counterparty risk due to shorter exposure periods
• Greater market efficiency through quicker trade finalization
• Improved investor confidence, particularly for institutional and foreign investors
Overall, a shorter settlement cycle supports a stronger, more resilient capital market.
PSX, NCCPL, CDC, along with securities brokers, nonbroker clearing members, custodians, settling banks, and other market institutions, are collectively ensuring the successful implementation of T+1. Through system upgrades, streamlined processes, investor education, and awareness initiatives, we are jointly enabling a smooth transition to the shorter settlement cycle.
The transition to the T+1 settlement cycle marks a significant milestone for Pakistan’s capital market. With coordinated efforts from regulators, infrastructure institutions, and the capital market stakeholders, T+1 will enhance efficiency, reduce systemic risk, strengthen investor protection, and bring Pakistan closer to global best practices. By embracing this reform, Pakistan demonstrates its commitment to modernization and positions itself as a regional leader in capital market innovation.
Copyright Business Recorder, 2026
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