The Securities and Exchange Commission of Pakistan (SECP) has officially initiated a formal stakeholder consultation to reassess the recently implemented T+1 settlement cycle. In a letter dated March 17, 2026, addressed to the leadership of the Pakistan Stock Exchange (PSX), National Clearing Company of Pakistan Limited (NCCPL), and Central Depository Company (CDC), the regulator acknowledged the need to evaluate the operational and liquidity challenges emerging from the compressed timeframe. This move follows mounting pressure from the brokerage community and investors who have highlighted visible stress across the market ecosystem since the shift from the traditional T+2 cycle.
The transition to T+1, which requires trades to be settled within a single business day, was intended to align Pakistan with global best practices and reduce counterparty risk. However, the reform has collided with local structural realities, including limited banking hours during Ramadan and a heavy reliance on cheque-based transactions. These factors have created significant funding mismatches, forcing brokers to bridge liquidity gaps at their own risk. Market analysts note that while shorter settlement cycles improve capital efficiency in fully digitized environments, Pakistan’s simultaneous rollout across all scrips has exposed gaps in banking integration and payment system readiness.
The consultation process is set to begin immediately after the Eid holidays and is expected to conclude within two weeks. The SECP aims to identify specific implementation hurdles, evaluate the impact on investor participation, and develop a coordinated roadmap for more sustainable operations. Seasoned investors have pointed out that even in advanced markets like India, the transition to T+1 was managed in phases to allow the ecosystem to adapt. In contrast, the abrupt change in Pakistan has intensified liquidity pressures during an already volatile period for the benchmark index and foreign fund movements.
By opening this dialogue, the SECP is signaling a willingness to recalibrate the pace of reform to match the country’s financial infrastructure. The consensus among market participants is that while T+1 remains a structurally sound goal, its success depends on synchronized support from the banking sector and a more phased execution strategy. A calibrated approach is now seen as essential to prevent systemic strain and ensure that the drive toward market modernization does not inadvertently stifle market liquidity or discourage retail participation.
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