Philippine Stock Market Structure, Trading, and Settlement (PSE, SCCP, PDTC)
Scope
This domain tests the Philippine equity market’s plumbing: PSE trading, SCCP clearing and settlement, and PDTC depository services. Questions often test the trade date and settlement date timeline and which entity performs each function.
Core rules
- The PSE operates the trading market and admits trading participants; it does not hold client cash or shares.
- SCCP clears and settles trades for clearing members, managing obligations and settlement risk.
- PDTC is the central securities depository; shares are immobilized or dematerialized and transferred by book-entry.
- PSE equity trades generally settle on T+2, with the settlement date rolled to the next business day if it falls on a holiday. Buyers pay cash and receive shares; sellers deliver shares and receive cash.
- Trading phases include pre-open, opening, continuous trading, and closing auction; board lots and price fluctuation limits apply.
Worked example
A client buys 1,000 shares at PHP 10 on Monday. Trade date is Monday; under T+2, settlement is Wednesday. The buyer must fund PHP 10,000 plus fees by settlement, and the seller delivers 1,000 shares through the depository system. If Wednesday is a holiday, settlement moves to the next business day. The broker executes; SCCP clears; PDTC records the book-entry transfer.
Traps
Do not say the PSE clears trades or that PDTC executes orders. Do not use T+3, an old convention. A “confirmed” trade is not final settlement, and a buyer does not receive a physical certificate by default.