Accelerated Settlement Working Group
Purpose
T+1 is a trend which is being investigated across the globe and in some countries is either already implemented or planned to be. The transition to T+1 (or zero) is non-trivial as it requires years of planning, testing and coordination across the industry to ensure that global investment flows can be efficiently managed. Nevertheless, the political and regulatory will is high and changes can be encouraged or required to reduce the settlement cycle.
The stated benefits of T+1 are mainly about counterparty risk, margin requirements, funding costs and innovation. On the other hand, such move would imply significant challenges especially on post-trade processes as the settlement cycle would be reduced with increased pressure notably on matching, liquidity, and cash management.
The Accelerated Working Group (WG) aims to provide in depth analysis on the impacts and possible mitigating actions that can be taken by investors and their securities servicers especially in the context of non-domestic investors. More particularly, the WG will assess assumptions, through the lens of cross-border impacts, on:
- Benefits of T+1 especially on risks, margins requirements and funding costs
- Challenges on post-trade processes
- Impacts on efficiency: settlement fails, cash penalties, securities financing transactions
Scope
The 2025 Agenda for WG includes:
- Continued engagement with the UK Accelerated Settlement Task Force via providing feedback on their plans, collaborating with ValueExchange on surveys of industry readiness and via briefings from our WG members who are Co-Chairs and members of the various workstreams in the UK.
- Continued engagement with the EU T+1 Industry Committee as an “Observer” industry association member, providing input to plans as they are formulated. Also collaborating with ValueExchange on surveys of industry readiness and via briefings from our WG members who are Co-Chairs and members of the various workstreams in the UK.
- Conduct a study of the various models of potential T0 settlement identifying their benefits, drawbacks, and implementation challenges
Key Deliverables
- A new white paper defining the various potential models of T0 settlement, their characteristics and implementation challenges, especially regarding cross-border transactions. This paper could also document how the challenges for international investors have been addressed in the U.S. T+1 implementation and in the planning for Europe and the U.K. T+1 implementations.
Key Outcomes
- Appropriate plans for cross-border transactions in all Accelerated Settlement implementations
Publications
- T+1 Pulse Check > link
- T+1 Pulse Survey Key Findings Report > link
- High Level Roadmap for Adoption of T+1 in EU Securities Markets >link
- White Paper “T+1 Global Impact”, December 2023 >PDF
- Launch of Governance Structure for European Transition to T+1 Settlement Cycle> link
Working Group Co-Chairs
- Haroun Boucheta, BNP Paribas
- Kamala Kannan, S&P Global
Executive Sponsor
- Hannah Elson, J.P. Morgan
Institutions represented by Experts in the Working Group
- ABN AMRO
- BNP Paribas S.A.
- BNY
- Broadridge Financial Solutions Inc.
- Citi
- Cofinpro
- Cognizant
- Deutsche Bank AG
- Deutsche WertpapierService Bank AG
- Erste Group Bank AG
- Euroclear
- European Central Securities Depositories Association ECSDA
- Hong Kong Exchange and Clearing Limited
- Intesa Sanpaolo Group / Privredna Banka
- JP Morgan Chase & Co.
- KBC Group NV
- LLB
- Nasdaq Inc
- New Zealand Clearing and Depository Corporation Limited
- Northern Trust Corporation
- Royal Bank of Canada
- S&P Global
- Standard Chartered Bank
- SWIFT SCRL
- Swiss Re Ltd
- Tata Group
- The Depository Trust & Clearing Corporation
- The Investment Association
- U.S. Bank N.A.