The key T+1 challenge for the US market from an FX perspective was the compressed timeline for executing the currency transaction on the back of the security and managing the necessary post-trade processing in order to settle safely and securely. At the upcoming PostTrade 360° 2025 conference, Lisa Danino-Lewis, chief growth officer at CLS, will elaborate on the importance of understanding the differences between CLS deadlines and the cut-off times set by custodians in her session titled “T+1 impacts through the trade journey, pt 4: funding and inventory”.
Note: Per late August 2025, Lisa Danino-Lewis has had to cancel her participation with the conference.
“There was a large amount of education in the market to increase understanding of how these time frames differ and that they are not directly linked,” says Danino-Lewis. “We saw custodians who set their cut-off times halfway through the European trading day, for example, which would make it physically impossible for any FX trade to be processed within the CLS deadline.”
This was a challenge from a post-trade perspective for some of the fund community, prompting them to consider changing their processes. For those affected, rather than wait until the equity is executed, they estimated their FX requirement and executed trades in advance, reconciling any difference the next day, leaving a small amount that wasn’t settled within CLS or with payment-versus-payment (PvP) settlement.
Focus on post trade
“Some smaller fund managers opt to trade directly with their custodians because it keeps their settlement more secure as opposed to going to a third party,” she adds. “There is a real need to look at how this process is managed and the risk that is introduced into those post-trade processes.”
This is especially important since much of the recent innovation and automation efforts have focused on the front office, pre-trade, and trading rather than the post-trade process.
“The real challenge in Europe is not on the FX side,” says Danino-Lewis. “It is more on the security side because there are multiple CSDs that make it more complex from a securities perspective than the UK or the US.”
Have you signed up yet to be in Stockholm for PostTrade 360° 2025 on 3–4 September? It’s free for securities operations pros, both trading and investor sides! (Vendor firm representatives need a sponsorship agreement.) The powerful event website lets you register, see all other delegates, schedule sessions and meetings, and message. Find all related articles, including loads of teaser interviews, here.
