Retail investors in Korea can now have their proceeds from the sale of U.S. stocks credited the following business day, aligning with the U.S. settlement cycle shortened in late May, Citibank Korea said Wednesday.
Underpinning the seamless upgrade were months of collaboration between the lender and the Korea Securities Depository (KSD) to bolster flexible reinvestment and cash management for investors in Korea. Institutional investors managing large assets will also benefit.
Since May 28, the proceeds from the sale of U.S. stocks have been credited on the following business day instead of the third day after the date of trade.
This change is due to the shortening of the settlement cycle in the U.S. securities market from two days (T+2) to one day (T+1).
Investors can respond more quickly to market volatility, access new investment opportunities faster and mitigate risks associated with settlement 바카라게임 delays from the previous longer settlement cycle.
In stock trading, losses are incurred due to severe price fluctuations or a failure to fulfill settlement obligations in a timely manner.
The GameStop incident in 2021 highlighted this risk that could affect investors, prompting the U.S. securities industry and investors to request the financial authorities to enhance the soundness and safeness of the financial market and provide a better environment for investors.
The incident in January 2021 involved a dramatic surge in the stock price of GameStop in the U.S. stock market.
The event was triggered when individual investors active on the internet community platform Reddit started buying large amounts of GameStop shares to counter the short positions held by major hedge funds.