The regulator’s resolution adapts the settlement period for negotiable securities to the 24-hour standard (T+1) to increase the efficiency and security of the market, aligning with international practices.
The National Securities Commission (CNV) shortened settlement times for cash transactions. As mentioned in the Resolution, the main objective is align the domestic capital market with international practices and, in particular, “encourage greater efficiency, liquidity and competitiveness in the market.”
In this way, the General Resolution 1029/2024 focuses on one key aspect: the unification of the settlement period for cash operations in 24 hours (T+1) for all negotiable securities, both variable income and fixed income.
The resolution establishes the modalities of cash operations (such as “immediate cash” and “24-hour cash”) and regulates short sales in particular, by including the requirements that markets must meet for this type of operations.
The detail of the standard
It also establishes the obligation for the Markets and Clearing Houses to definitively adopt the T+1 settlement period for fixed income securities. eliminating the option to maintain the previous T+2 deadline. The regulations also require that these entities present the necessary adjustments to comply with the new regulation within a period of ten business days.
As mentioned before, shorter settlement times reduce waiting times and allow for faster execution of trades. This, in turn, offers greater efficiency that can increase trading volume and improve market liquidity.
The official text maintains that the reduction of settlement periods reduces the risk of default and contributes to the stability of the financial system.
Source: Ambito
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