Missing securities, when they should be delivered, is the main reason that settlements fail and the settlement cycle could be difficult to shorten to T+1. It sounds simple, but what is the root cause behind those securities’ missing in the first place? The final panel session of PostTrade 360° Copenhagen looked into the prerequisites for quicker settlement.
“What some people will have to do is rethink how they perform these trades in order to implement T+1, and this could take new systems,” says Andrew Douglas, Managing Director & Head of Government Relations for EMEA & APAC, DTCC. He encouraged market participants to see the shift as “a great opportunity to generate some wholesome change” across their operations.
He formed the panel together with …
Jørn Strunge, Head of Financial Infrastructure, Wealth Markets Operation, Nykredit, and
Frederik Stokholm, Senior Product Manager, Euronext Securities Copenhagen,
under moderation by Vinod Jain, Senior Analyst, Capital Markets, Aite-Novarica Group.
A T+1 cycle would mean the time to fix problems would be significantly reduced.
“I can’t emphasise enough the need to standardise and to introduce as much automation as you can,” said Andrew Douglas, recommending those who play in the US market to begin looking into it immediately.
Sometimes shortselling can cause a deficit of the papers meant to be delivered.
US equities are planned for day-after-trade settlement (T+1) starting in the first half of 2024. In Europe’s more complex landscape, it is expected to come later, but there is little doubt where the winds are blowing.
• News around PostTrade 360° Copenhagen 2022, on 20–21 September, is gathered here.
• The conference info site, with detailed agenda, is here.
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