As market participants on both sides of the Atlantic grapple with the move to T+1, the Global Financial Markets Association (GFMA) looks ahead to T0 and continuous settlement. In the third educational paper of its Market Architecture Group (MAG) series, the association sets out some recommended considerations for participants who are contemplating moving at scale.

Citing numbers from the Bank for International Settlements (BIS), GFMA points out that settlement risk has continued to grow in recent years. In April 2022, approximately USD 2.2 trillion in daily FX turnover was subjected to settlement risk, compared to USD 1.9 trillion three years ago in April 2019. Yet, the paper writes that “at this time it is not clear if there is a market desire – or ability – to move at scale”, attributing the hesitation to “the significant nature of the changes required, and the considerable cost and coordination involved”.

Choices and consequences

Despite this, market participants today actually enjoy increasing choice in how to execute and settle wholesale FX transactions due to three factors: technology, a push in the industry to increase operational efficiencies, and supervisory and regulatory developments. The paper goes into further detail on how each factor could influence the industry’s adoption of T+1.


Technology – Since it is difficult to predict which technologies will be adopted at scale by the market, it is critical to ensure that there are degrees of interoperability between new technologies, new participants, and traditional currency-based payment-versus-payment (PvP) systems.
Operational efficiencies – Quick, clear, and fully sharing of information between multiple divisions will be necessary in order to perform functions in a shorter period of time. Initially, it is likely that only highly automated FX transactions would be suitable for T0 or timed settlement.
Supervisory and regulatory developments – Evolving regulation and industry practices should continue to enable innovation, be future proof, and protect the market’s transparency and integrity.