No Change To CLS Settlement Timeline For T+1
No Change To CLS Settlement Timeline For T+1
T+1 arrives in North America on May 27th and 28th this year. The UK Technical taskforce is working towards implementation of T+1 in the UK by the end of 2027. The EU markets have yet to set a date, but it is anticipated they will also move in due course. In the meantime, North America will be out of line with the other major capital markets. Unfortunately, this is likely to be at the expense of investors.
Today, CLS stated that there will be no change to it’s settlement timeline for T+1, but is leaving the possibility open, to work with the capital markets to find mitigating solutions for the time gap costs and risks created by this move.
This announcement from CLS was not unexpected and is justified by the data and business make up of it’s processing and the vital importance of FX netting across the worlds financial markets. CLS has responsibility for ongoing FX settlements for the wider user community, with only a very small percentage of it’s daily volume coming from the capital markets, although in value this may account for a larger percentage.
ISITC Europe’s research has shown the necessity for funding solutions created through North America’s move to accelerated settlement to be introduced before the UK/European capital markets move to T+1.
ISITC Europe is concerned about the increased cost and risk to investors, if no solution is made available prior to this move. ISITC Europe recommends that capital market infrastructure firms work with CLS to identify a solution to the cost and risk gap being created as a result of the move to T+1. It is imperative that solutions are identified as early as possible to provide confidence to investors that any increased costs and risks they incur will be rectified.
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