PNGX to move to T+2 settlement from July 2023

By: PNG Business News May 04, 2023

PNGX, Papua New Guinea’s national stock exchange, will move to faster settlement of trading from 3 July 2023.

PNGX’s Business Rules, which govern the trading and settlement of all trades on the market by stockbrokers, will be amended to require settlement on the second day after a trade (T+2), which is faster than the current 3 days (T+3).

The proposal was released for consultation in October 2022 with the new Listing Rules.

The change from T+3 to T+2 brings the PNG market in line with markets around the world.

T+2 means quicker payment for investors when they sell shares. It also reduces the risks to investors, stockbrokers and PNGX.

Ms Elizabeth Wamsa, PNGX General Manager said “We would like to thank the current stockbrokers and the Securities Commission of Papua New Guinea for their support for this change. Making the market more efficient is one way we can try to attract more stockbrokers, more investors and more listed companies.”

The amendments to the current Business Rules are the precursor to a comprehensive rewrite of the Business Rules to be completed in the second half of 2023.

“This change improves the efficiency of the PNGX market. It is another step in ensuring that PNG has a world class capital market that is internationally respected and recognized” said PNGX Chairman, Mr. David Lawrence. “It is part of a larger, long-term PNGX program to further develop the market. But to be able to fund those future changes, PNGX needs to have confidence there will be structural change and increased activity in the market by way of initiatives such as privatisation of SOEs, greater on-market activity by superannuation funds, tax reform and incentives for listing, wholesale corporate debt market and more trading activity by retail investors. We can’t justify spending millions of kina based on current levels of activity without stakeholder commitment to growth” he said.

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