Many market participants remain unprepared for move to T+1, finds ValueExchange
09 March 2023 UK
Image: The ValueExchange
Many market participants remain unprepared for the US and Canada’s move to T+1 and face readiness challenges, according to research company, The ValueExchange.
The survey, entitled “Operationalizing T+1”, found that the lack of preparation could create potential risks ahead of the confirmed May 2024 implementation date.
Some 41 per cent of those surveyed say they have not yet begun their preparations for the move to the shortened settlement cycle. Just 46 per cent of global firms expect to be ready for the transition by May 2024.
On the buy-side, 61 per cent of respondents remain unprepared for the move, especially mid -tier and boutique firms. Readiness amongst firms for the move to T+1, in both the US and Canadian markets, is at the same level.
Firms in Europe and APAC face the challenges of managing foreign exchange and time-zone differences that add additional complexity to handling US and Canadian post-trade processing in a T+1 environment.
More than 50 per cent of European and Asia-Pacific market participants are yet to define how they will manage critical areas such as foreign exchange and securities lending. As a result, firms may struggle to scope, fund and deliver the required changes to their core systems within the 14 months that remain before the market transition.
More than 280 industry participants responded to the survey. The ValueExchange is an international market research and benchmarking company, focused on the global capital markets. Its research was sponsored by The Depository Trust & Clearing Corporation (DTCC) and the Canadian Depository for Securities. Further support for the survey came from the Association for Financial Markets in Europe, the Canadian Capital Markets Association and ISITC.
Barnaby Nelson, CEO of the ValueExchange (pictured), says: “These results underline a significant engagement challenge across our industry on the move to T+1. With a consistent 40 per cent of market participants still unsure of how and when they will prepare for the move to T+1 settlement, we face an urgent need for all profiles of organisation to confirm and realise their project plans quickly.”
Matthew Stauffer, managing director, head of institutional trade processing at DTCC, comments: “Now is the time for market participants to advance preparations for T+1, regardless of geographical location, to ensure readiness by the May 2024 deadline.
“DTCC recognises that significant challenges remain ahead of implementation and will continue to partner closely with the industry to promote a successful transition to T+1 and to safeguard the stability of the markets. We are ready to work collaboratively with market participants to test for readiness, assess workflows, optimise firm’s global operating models and drive greater automation.”
The survey, entitled “Operationalizing T+1”, found that the lack of preparation could create potential risks ahead of the confirmed May 2024 implementation date.
Some 41 per cent of those surveyed say they have not yet begun their preparations for the move to the shortened settlement cycle. Just 46 per cent of global firms expect to be ready for the transition by May 2024.
On the buy-side, 61 per cent of respondents remain unprepared for the move, especially mid -tier and boutique firms. Readiness amongst firms for the move to T+1, in both the US and Canadian markets, is at the same level.
Firms in Europe and APAC face the challenges of managing foreign exchange and time-zone differences that add additional complexity to handling US and Canadian post-trade processing in a T+1 environment.
More than 50 per cent of European and Asia-Pacific market participants are yet to define how they will manage critical areas such as foreign exchange and securities lending. As a result, firms may struggle to scope, fund and deliver the required changes to their core systems within the 14 months that remain before the market transition.
More than 280 industry participants responded to the survey. The ValueExchange is an international market research and benchmarking company, focused on the global capital markets. Its research was sponsored by The Depository Trust & Clearing Corporation (DTCC) and the Canadian Depository for Securities. Further support for the survey came from the Association for Financial Markets in Europe, the Canadian Capital Markets Association and ISITC.
Barnaby Nelson, CEO of the ValueExchange (pictured), says: “These results underline a significant engagement challenge across our industry on the move to T+1. With a consistent 40 per cent of market participants still unsure of how and when they will prepare for the move to T+1 settlement, we face an urgent need for all profiles of organisation to confirm and realise their project plans quickly.”
Matthew Stauffer, managing director, head of institutional trade processing at DTCC, comments: “Now is the time for market participants to advance preparations for T+1, regardless of geographical location, to ensure readiness by the May 2024 deadline.
“DTCC recognises that significant challenges remain ahead of implementation and will continue to partner closely with the industry to promote a successful transition to T+1 and to safeguard the stability of the markets. We are ready to work collaboratively with market participants to test for readiness, assess workflows, optimise firm’s global operating models and drive greater automation.”
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