AFME launches T+1 taskforce
02 March 2023 UK
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The Association for Financial Markets in Europe (AFME) is to launch an industry taskforce for T+1.
The group will consider whether Europe should move to a shorter settlement cycle, following the lead of other jurisdictions around the world.
Additionally, the question of when this move would happen will be discussed. The changes that would be necessary to allow for a T+1 cycle in Europe will be identified, along with a timeframe and action plan.
Adarm Farkas, CEO of AFME, says: “With the US having announced its intention to move to T+1 settlement by May 2024, the discussion on whether Europe should follow suit has become more pressing. Addressing this important topic will require a collaborative approach, and therefore all impacted stakeholders are encouraged to join the industry taskforce.”
Pete Tomlinson, director of post trade at AFME, comments: “AFME is convening this industry taskforce to ensure all aspects of T+1 adoption in Europe are considered, including direct economic costs and savings to the industry, as well as less tangible factors such as global alignment and market attractiveness. It is important that such a move is carefully considered.
“A rushed approach is likely to result in increased risks, costs and inefficiencies, particularly given the unique nature of European markets which have multiple different market infrastructures and legal frameworks.”
Commenting on the announcement, Javier Hernani, head of SIX Securities, adds: "The steps taken in North America to shorten the settlement cycle have raised important questions as to when Europe will follow suit. Any decision to move to shorter settlement times in Europe must be made after considering what technological innovations are necessary to facilitate T+1, the role of market infrastructure providers – such as exchanges, clearing houses and CSDs – and, most importantly, how this will impact market participants."
The group will consider whether Europe should move to a shorter settlement cycle, following the lead of other jurisdictions around the world.
Additionally, the question of when this move would happen will be discussed. The changes that would be necessary to allow for a T+1 cycle in Europe will be identified, along with a timeframe and action plan.
Adarm Farkas, CEO of AFME, says: “With the US having announced its intention to move to T+1 settlement by May 2024, the discussion on whether Europe should follow suit has become more pressing. Addressing this important topic will require a collaborative approach, and therefore all impacted stakeholders are encouraged to join the industry taskforce.”
Pete Tomlinson, director of post trade at AFME, comments: “AFME is convening this industry taskforce to ensure all aspects of T+1 adoption in Europe are considered, including direct economic costs and savings to the industry, as well as less tangible factors such as global alignment and market attractiveness. It is important that such a move is carefully considered.
“A rushed approach is likely to result in increased risks, costs and inefficiencies, particularly given the unique nature of European markets which have multiple different market infrastructures and legal frameworks.”
Commenting on the announcement, Javier Hernani, head of SIX Securities, adds: "The steps taken in North America to shorten the settlement cycle have raised important questions as to when Europe will follow suit. Any decision to move to shorter settlement times in Europe must be made after considering what technological innovations are necessary to facilitate T+1, the role of market infrastructure providers – such as exchanges, clearing houses and CSDs – and, most importantly, how this will impact market participants."
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