European asset managers are tackling challenging human resources issues in preparation for the move to T+1 in the US, reports the Financial Times. From relocating staff to the US to adopting night shifts, the article writes that “the new rules will require a huge shift in timelines and behaviours as firms rewire the entire life cycle of their trading”.
The above assessment was made by Brian Collings, CEO of post-trade software provider Torstone Technology, who was quoted for the article. “You might literally have to change what time you get out of bed”, he says. He expects roles most affected to be those “managing equity settlement, securities lending, corporate actions, cash management and collateral”. Teams will have to “become quicker and more effective” since there will be less time to edit “in-flight” trades if there were errors.
Size matters
Val Wotton believes that larger asset management firms are already “well prepared for T+1”. But the president and CEO of the Depository Trust & Clearing Corporation’s (DTCC) Institutional Trade Processing unit expressed worry for mid to smaller-sized asset management firms that “might be depending on their broker-dealers or custodians to fulfill their obligations”.
President of clearing firm Cboe Clear Europe Vikesh Patel expressed agreement that a firm’s resources would impact its experience of the shift to T+1, pointing out that the steps firms take will depend on “their size, footprint, and their prime brokers’ coverage globally and particularly in the US”.
UK-based investment firm Abrdn claimed to be unaffected by time zone issues as it “already has operations and fund management teams in North America”. Dutch asset management firm Robeco revealed that it has a trading desk in New York and has “outsourced its back and middle offices to a provider that uses a ‘follow the sun’ support model”, which is also commonly adopted by major investment banks.