T+1 feedback report shows mixed impacts of shortening the settlement cycle in the EU
March 21, 2024-The European Securities and Markets Authority (ESMA), the EU's financial markets regulator and supervisor, is today publishing feedback received to its Call for Evidence on shortening the settlement cycle.
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Many operational impacts beyond adaptations of post-trade processes are identified as resulting from a reduction of the securities settlement cycle in the EU.
Respondents identified a wide range of both potential costs and benefits of a shortened cycle, with some responses supporting a thorough impact assessment before deciding. Respondents provided suggestions around how and when a shorter settlement cycle could be achieved, with a strong demand for a clear signal from the regulatory front at the start of the work and clear coordination between regulators and the industry. Stakeholders made clear the need for a proactive approach to adapt their own processes to the transition to T+1 in other jurisdictions. Some responses warned about potential infringements due to the misalignment of the EU and North America settlement cycles, that ESMA is currently assessing. |
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