At the Association for Financial Markets in Europe (AFME) Operations, Post-Trade, Technology & Innovation Conference (OPTIC) 2022, industry experts came together in London to discuss how European capital markets, and the operational framework that underpins them, 正在进化. 存 leaders joined panels focused on 帖子-trade settlement.
存的 马特•约翰逊, 导演, Digital Platform Management and Industry Relations, discussed settlement efficiency while 存的 Andrew 道格拉斯, 董事总经理, 政府关系 for EMEA and Asia, spoke about T+1 settlement. Below are highlights from their panels:
结算 Efficiency: More Than Just Fines
While the mandatory buy-in aspect of the 结算 Discipline Regime (SDR) of the Central Securities Depository Regime (CSDR) has been delayed, there is still an industry-wide need to reduce settlement fails—for both investor protection and to promote financial stability. Cash penalties have made firms realize that while the middle office does not generate revenue, it possesses a significant ability to lose revenue due to settlement fails.
Improving Data Will Improve 结算
Data is needed to help find the root cause of settlement fails. The behaviors causing the fails need to be addressed and market practices need to change rather than trying to force a one size fits all approach. Johnson outlined enhanced quality, industry standardization and increased frequency as three important factors for making data safe and efficient enough for markets to use.
Related: Preparing for T+1 Using ITP数据分析
CSDR的影响
Many firms used CSDR to streamline processes with a focus on managing penalties. However, there was less focus on streamlining and revamping securities trade processing. A push to T+1 could help the industry achieve higher settlement efficiency and, 可能, provide an alternative to mandatory buy-ins.
Accelerating to T+1 in the U.S.
美国的这一举动.S. to accelerated settlement will be the focal point in 2023, not just for the U.S., but for firms globally. Johnson stressed that this may be the biggest 帖子-trade jump in our lifetimes, bringing a myriad of challenges – including the potential for an increase in settlement fails – as well as opportunities.
道格拉斯, 与此同时, outlined the general plan, noting “2022 is a year of planning, 2023 a year of building and 2024 a year of implementing. We are waiting on the Securities and Exchange Commission for the final date of implementation, expected in early 2023.”
Related: Get more information about accelerating to T+1 in the U.S. 在UST1.org.
Looking Toward T+1 in Europe
European and UK participants investing in US securities will need to review their operational procedures for dealing with allocations, affirmations and settlement in the US and this will likely lead to discussions on whether the UK and/or the EU markets should move to T+1. In the 帖子 Brexit environment, it is likely that each will investigate a move to T+1 separately.