This has slowly been improving through the year, though some timeliness issues remain. The IA are continuing to work with members and wider market stakeholders on market practices for intermediaries processing cash penalties.
The IA have been working with members and EFAMA to advocate for a cash penalty de-minimis, a value below which cash penalties are not processed by the CSD. Although there is broad support across European buy-side firms for a de-minimis, this is not necessarily shared by the wider industry. Outreach has been made to European Council and Parliament members, though receiving their consideration is challenging, with political focus prioritising mandatory buy-ins.
The US continues to discuss a reduction from a T+2 settlement cycle down to T+1, citing a reduction of capital requirements and counterparty risks as benefits. The IA has been working with members to discuss the implications of the US moving to T+1, and the challenges this places on various parts of the