Zim markets can shift to faster T+1 settlement on consensus – CDC

By ETimes

HARARE – ZIMBABWE’S capital markets allow trades to be settled as quickly as the same day, though the official framework is defined as up to two days, Chengetedzai Depository Company chief executive Prosper Mutorogodo said.

Mutorogodo explained that the current standard is transaction plus two days (T+2).

“So it means that from the day you buy, you then count two days. Two days later, you receive your settlement,” he said.

“However, within the Zimbabwean environment, settlement is actually possible from the day you buy, which is why the Zimbabwean settlement framework is defined as up to T+2.”

He noted that trades can be settled on T+0, T+1 or T+2 depending on market consensus.

“For us to move to T+1, it’s really a matter of market consensus. To say, as a market, do we agree amongst ourselves to then do settlement on T+1? And even as we then do settlement on T+1, it will still be possible for someone to settle on the day that they trade,” Mutorogodo said.

According to him, the flexibility is already embedded in the system.

“Within the Zimbabwean capital markets, it’s actually there for the taking, for people to decide. To say, do we want to settle on T+1, even T+0, depending on a certain market provision being in place, and also market consensus in terms of that migration,” he added.