VIDEO | It is North America that will shorten its standard settlement cycle on the 27–28 May – but as European firms trade securitites there, these firms, too, will need to adapt their post-trade process. This expert panel at the recent PostTrade 360° Amsterdam conference looked into the details of what needs to get in place – and how the urgency level is ticking up. Has your organisation checked these boxes yet?
“The first glaringly obvious thing is that if you haven’t started any kind of projects or analysis yet, you’re leaving it extremely late – so, please kick off,” urged DTCC’s Matthew Johnson.
With radically decreased time for human troubleshooting, together with a troublesome time zone difference, new ways of thinking are needed. Even so, a poll of the room in Amsterdam indicated that half of the conference delegate’s organisations were not even started on their implementation phases, but still in planning – or not even.
Panellists were …
Alan Cameron, Head of Client Line Advisory, Securities Services, BNP Paribas,
Elly van Gils, Securities Services Head Netherlands & Belgium, Citi,
Matthew Johnson, Director, DTCC, and
Rebecca Carey, Director, Euroclear,
… under the moderation of Virginie O’Shea, Founder, Firebrand Research
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For European firms buying into US Securities, Elly van Gils sees the transition as “a big thing we have to worry about”. “Are they aware, and do they know all the implications,” she asked.
“And also, there are the US multi-listed securities. There is a debate ongoing: does it follow the place of trade, or the place of settlement? Obviously, from Europe, we say it has to follow the place of settlement, otherwise you might be facing a T+1 cycle in a CSD that is completely unprepared for it. So that is a big concern prior to the US going live, that we think must be concluded upon, definitely way before May,” Elly van Gils continued.
Rebecca Carey added points to the list.
“You have questions when you got to move securities around. How do you manage it when you’re trading T+2 here and T+1 in the US? Do you need to find an extra rail of funding? Are you going to fail? How do you manage the inventory management process? So you have one question of what we do here in Europe – but then the other one is how you manage your inventory afterwards? So, you have a problem either way,” she said.
Yet another aspect is how to manage the people who work in the process.
“How do you manage the day, you know the issue of timing? I hear that in the US, they are actually moving people west. What are we going to do here? We can’t really go further west. So how do you manage being able to work later? I think that’s definitely something that people need to think about in preparation. And I guess we’ll need more people over that double settlement day,” said Rebecca Carey, also seeing risk that the changes could take a toll in the form of cancelled holidays and off-days for staff.
For a quick check list to your adaptation process, don’t miss Matthew Johnson’s highly concrete suggestions from the 2-minute to 4-minute mark in the video.
• Our news posts from PostTrade 360° Amsterdam 2023, on 30 November, and previous years, are gathered here.
• The conference info site, with detailed agenda, is here.
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