Investment Operations

T+1 Settlement

US (and Canada, Mexico, Jamaica, Argentina, Peru) go-live – On the 28^th May, the US went live with a transition to T+1 settlement.

Feedback from our member firms has largely been that the transition has gone well, testament to the amount of work which member firms have put into preparing for the transition.

Affirmation and settlement rates were higher than prior to the go-live. Achieving not just an equal, but an improved rate of affirmation was a big win.
Higher affirmation and confirmation rates of securities trades enabled firms to calculate their FX requirement faster than previously, which facilitated a greater proportion of FX trading than expected at EMEA end of day.
Firms faced higher costs for US end of day

FX trading, along with lower liquidity.
Access to funding was still possible, with extended settlement and custodian overdraft still available, though in some cases this came at a cost.

UK & EU T+1 Settlement – Given the US has transitioned to a T+1 securities settlement cycle, attention for firms turns to a potential UK and EU transition.

In the UK – Charlie Geffen’s report suggested that the UK should transition by no-later than the end of 2027. The subsequent technical group established following Charlie’s report is due to propose a date by the end of 2027.

In the EU – ESMA are due to publish the findings of their Call for Evidence later this year as they look to lay-out their own path to a potential T+1 transition.

The IA is working with member firms to establish a view on a potential UK/EU transition. There is appetite for an aligned UK/EU/CH move to T+1 settlement, though also a view that alignment across settlement cycles globally works best for the buy-side.

EMIR Refit

EMIR Refit went live for firms at the end of April 2024 in the EU, increasing the total number of reportable fields from 129 to 203. We have been working with members on this transition over the last year with two working groups, one for reporting firms and one for delegating firms.

Feedback on go-live has been mixed. Whilst firms have made good improvements in both the completeness and accuracy of their reports since go-live, there have been some issues at an infrastructure level. Some trade repositories, a crucial infrastructure for EMIR trade reporting, have had issues in how firms submit reports to them, which has impacted firms’ ability to adhere to the regulation.

The IA have been engaging with members, TRs and with regulators on these issues before looking to pivot into preparedness for the UK September go-live.