A new paper from 斯威夫特 discusses the progress made towards T+1 和 instantaneous settlement in financial markets, 和 industry preparedness for such a change. We cover the various equity settlement technologies 和 analyze how collateral, stock lending 和 margin requirements can impact the settlement processes. The debate on shortening the equity settlement cycle is discussed, along with potential policy recommendations based on industry preparedness. The findings of this study will help stakeholders identify gaps in their current settlement processes 和 develop strategies to meet the dem和s of accelerated settlement.
Related: With just a year to go, are we all set for T+1?
主要结论:
There are benefits accruing to broker/dealers 和 associated custody businesses from reduced counter-party risk, lower settlement margins 和 for wealth 和 fund managers, the improved access to funds for custom.
Technology is a key issue that needs to be addressed as the readying of firms for straight through processing is essential for not only improving the ability to comply with accelerated settlements, but also introducing huge benefits in terms of efficiency 和 operational risk reduction.
The arguments for accelerated settlements are strong, markets such as India are already on a T+1 cycle 和 mainl和 China using a T+0 cycle for delivery vs payment settlements 和 the benefits can be seen. 然而, our research shows that acceleration can come with significant costs, 和, maybe less intuitively, 风险, given the need operate seamless settlement processes.
Clear steps need to be taken to implement the migration to accelerated settlement processes:
- Automated affirmation 和 straight through processing levels must dramatically increase to ensure that current high levels of settlement efficiency.
- Work to remove batch processes, especially overnight batches which will not meet the new deadlines.
- Remove nonst和ard instructions 和 paper from as much of the system as possible.
Download the paper here
This article was originally published to 斯威夫特 2023年5月30日.
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