The ASX said this will create capital and margin savings for the industry, along with a quicker settlement of transactions for investors.
According to the ASX, the T+2 cycle will reduce counterparty risk for individual investors, participants and the central counterparty, as well as decreasing the regulatory capital required to be held by market participants.
It will also standardise regional and global settlement practices and improve post-trade operational and process efficiencies, and associated cost savings.
The ASX estimated that if T+2 had been implemented from June 2012 to December 2013, daily cash market margins for the total market would have been around 20 to 30 per cent lower.
This would have reduced total margin payments by $30 million to $40 million.
It potentially could have also reduced liquid capital requirements for the industry by $60 million to $120 million.
The ASX said introducing T+2 may also allow it to remove its clearing fee for cash equities.
It is currently asking for feedback from the industry on the benefits of the new settlement period, the timetable for implementation and other issues that need to be addressed.
