The board of the Bucharest Stock Exchange (BVB) wants to shorten the settlement cycle from the current T+3 to T+2, starting October 6 this year.

This should allow investors to cash in their money from the sale of shares on the Romanian capital market two days after the transaction compared to the current three days.

The measure was imposed by the European Union and all the exchanges in the EU must comply by 2015. Markets in Germany and Bulgaria have already reduced their settlement cycle, but most European markets still work with the T+3.

A shorter settlement cycle should reduce risks for investors, but this requires changes in the infrastructure of the Central Depository and in the back-office systems of local brokerage firms.

Some local brokers have asked for this to be delayed until January 2015. However, this would make Romania the only exception in the EU as all other exchanges will make the change in the settlement cycle on October 6.

editor@romania-insider.com