KARACHI: Pakistan’s capital market has formally moved to a T+1 settlement cycle, marking a major step towards faster, safer and more efficient trading. The new system took effect on February 9, 2026, replacing the earlier T+2 settlement framework for eligible trades at the Pakistan Stock Exchange (PSX).
Under the T+1 cycle, trades are settled one business day after execution, meaning investors receive securities or funds on the next trading day. Previously, under the T+2 cycle, settlement took two business days after the trade date. The shorter timeline reduces the period during which trades remain unsettled, lowering risk and improving market efficiency.
The transition has been carried out under the oversight of the Securities and Exchange Commission of Pakistan (SECP) in coordination with key market institutions, including the PSX, National Clearing Company of Pakistan Limited, Central Depository Company, Pakistan Stock Brokers Association, State Bank of Pakistan, Pakistan Banks Association, Mutual Fund Association of Pakistan, clearing members, asset management companies and settling banks.
With this move, Pakistan joins markets such as the United States, Canada, Mexico, Argentina, Jamaica and China, which have already adopted T+1 settlement. European markets, including the UK and Switzerland, are expected to follow by 2027, placing Pakistan ahead of several advanced jurisdictions in adopting the reform.
Market participants say the shift will improve liquidity by allowing quicker access to funds and securities, reduce settlement and counterparty risk, and enhance overall investor confidence, particularly among foreign and institutional investors.
SECP Chairman Dr Kabir Ahmed Sidhu praised the PSX, CDC and NCCPL for the successful rollout, saying the reform brings Pakistan’s capital market in line with modern global standards while strengthening transparency, liquidity and risk management.
