AFTER months of waiting, come Monday the buying or selling of stocks on the Jamaica Stock Exchange (JSE) will get a lot snappier, and traders will also have more time in which to buy and sell each day.

The change will be the biggest upheaval on the JSE since it moved to having transactions being “settled” within two business days after initiating the transaction before the stock is officially transferred to the buyer’s account and the cash delivered to the seller’s account, in December 2017 — that is the “T+2” settlement cycle that has been in use since December 2017. Starting tomorrow, those transactions will be settled under a new “T+1” cycle.

“So, one day after you trade you will have your cash settlement and your securities settlement,” Marlene Street Forrest, managing director of JSE, told the Jamaica Observer in an interview on Friday.

“It means that the investor will have access to their securities or cash to do what they want quicker, and it also reduces market risks, settlement risk.”

Other benefits include operational process improvements, increased market liquidity, and reduced foreign exchange risk in US-dollar transactions with the shorter settlement time.

Street Forrest says the change is to bring Jamaica in line with international best practices when it comes to settling stocks, bonds, and other securities traded on the JSE.

Other countries such as Canada, Mexico and Argentina will speed up their market transactions on Monday, as well. The US will follow suit on Tuesday, a day later than Jamaica and the other named countries, mostly due to the Memorial Day holiday in that country on Monday. The UK is expected to follow in 2027, and Europe is considering the change. Other markets like India phased in a T+1 settlement cycle in January 2023 and is now setting its sights on same-day settlement, to join China where stock settlement is T+0 and T+1 is for cash settlement.

Speedier transactions on the JSE aside, the JSE said it will follow through on its plan to give investors an extra one-and-a-half hours.

“We have extended hours for trading to five hours; we now trade for three and a half hours. So, our market will pre-open at 8:30 am tomorrow and at 9 o’clock we begin trade and we will end trading at 2:00 pm — so we have extended trading by one-and-a-half hours,” Street Forrest added.

She said the changes are in keeping with the requests from investors for longer trading hours.

“This will assist those who go to the brokers or those who will trade online. It is all positive, and we are preparing for the next phase of the market when it will become very, very active.”

Trading volumes have sagged in recent times but Street Forrest said the increased level of transactions the change will facilitate is being implemented at the right time.

“You must prepare the market for [the upturn in it]. You must have all these things in place so that when the market picks up, you are not lagging and responding to the market after the fact.”

She also noted that the move to T+1 and the extended market hours required changes to the JSE’s rules, impacting how listed companies and member/dealers provide information to the JSE. She assured the financial community that these changes are in the best interest of all stakeholders.

Brokerage firms, listed companies and the general investor public have been sensitised about the changes over the last six months.