SETTLEMENT
Mixed views on deadline for settlement change Market participants are generally in accord over the merits of moving to T+1 in the US, but concerns remain about the timeframe for achieving this switch. From Pirum’s participation in industry working groups (and as it relates to securities lending activity) the consensus of market participants is that the proposed deadline of mid-2024 for moving to T+1 in the US is an appropriate and natural progression to the continuing operational advancement and efficiency of US market settlements observes Bob Zekraus, the firm’s chief operating officer and head of the Americas. “That being said, there is an appreciation and acknowledgment that more work needs to be done to harmonise the market for a move to T+1 settlement,” he says. “The move
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to T+2 five years ago was more behavioural in nature, whereas the move to T+1 is much more technical and thus requires more time to analyse operational processes with the focus on recalls, affirmation, and increased emphasis on real time automated connectivity between lenders and borrowers compared to the current outdated model of batch processing.” Zekraus observes that market participants are exploring both existing facilitators and areas of development to help realise the future changes to market structure in an accelerated settlement cycle.
