It is now just one month until the long-awaited move to T+1 for US securities transactions. For one group of market participants – non-US asset managers and funds – it is still uncertain how matters will play out after May 28, particularly since FX settlement organization CLS earlier this month scotched a possible easing of its deadlines.
At the moment, participants can transact in US securities very late in the day in Europe, safe in the knowledge that they have all the following day to carry out their FX trade and still meet the CLS settlement deadline of 11pm London time that day, so that both the FX and the securities trade can settle on the day after that.
The move to T+1 securities settlement scuppers that arrangement because the FX will need to be settled by the time the securities trade settles, one day earlier than now.
For those in this predicament,...
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