Shortening the settlement cycle is generally a good thing to do. Even so, it shouldn’t be the immediate concern to start with for Europe’s financial markets and infrastructures. This – perhaps surprisingly – seemed to be the predominant view among the industry representatives on and off the stage at AFME’s Optic conference in Brussels on Tuesday.

With Canada and the US moving to its T+1 standard settlement cycle for securities on 27 and 28 of May 2024, Europe has come to talk of when – not so much if, anymore – we should follow. But if this panel of the Optic conference is to judge the situation by, that could all be the wrong end to start. Instead, the first thing to do should be to sort out the processes and infrastructure properly – including getting on top of the settlement fails.

Speakers, in the session called “T+1 and the path to settlement efficiency”, were … 
Jesús Benito, Head Domestic Custody & TR Operations, SIX,
Lisa Danino Lewis, Chief Growth Officer, CLS Group,
Matt Johnson, ITP Product Management & Industry Relations, DTCC, and
Sachin Mohindra, Executive Director, Goldman Sachs,
… in discussion moderated by Alan Cameron, Head of Advisory FIC Client Line, BNP Paribas.

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In a poll, the audience was asked whether “shortening settlement cycles [is] a top priority for European capital markets”. The response could have been coloured by the panel already having gone into the drawbacks, and the European’s Commission determined position presented in Jennifer Robertson’s speech just minutes earlier. In any case, two thirds of the audience voters went for the alternative “No. There are plenty of other things that we should get on with”, while the remaining one third ticked “Yes. We need a modern approach. It will give efficiency.”

One challenge coming with faster settlement is the need to get hold of money of the right currency at short notice. This pushes market participants out into the foreign exchange market at hours when the FX market could be at its least liquid. It could also eat into the possibilities of reducing foreign-exchange settlement risk by using the CLS service to net it down radically.


The yearly Optic conference, in Brussels on 17–18 October 2023, is hosted by the Association for Financial Markets in Europe (AFME). Optic stands for the “Operations, post trade, technology and innovation conference”. PostTrade 360° is there, with our coverage collected here.