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European CSDs and international CSDs ( ICSDs ) will play an important role in this shift ; collaboration with other market infrastructures will be crucial , especially as the operational requirements and product scope for T + 1 is still being defined by European authorities . The pan-European platform T2S will also play a significant part in streamlining settlements across jurisdictions , explains Sancin .
The challenge for Europe “ The challenge will be getting these CSDs to collectively agree on new cutoff times or other market changes , which requires a much higher degree of collaboration between CSDs and regulators ,” asserts Wotton . Sancin continues : " Governance needs to be defined . Who will play in Europe the key role that DTCC had for the US market ?" This raises the crucial question of establishing a central authority to facilitate the transition , ensuring fairness across EU markets . In Europe , CSDs are regulated by national competent authorities ( NCAs ), while ESMA oversees broader market dynamics - creating a much more complex environment . Unlike in the US , where firms used the transition to T + 1 as a chance to streamline and automate , Europe ' s many moving parts make coordination a tougher challenge . Wotton underscores the importance of taking the necessary time for a wellplanned transition , while Sancin adds : “ A rushed transition could be detrimental to EU efficiency and competitiveness for years to come , not favouring investors at all .” A unified European taskforce has been deemed key to steer the transition effectively . While the UK and Switzerland align more closely with the US model , Europe ’ s unique challenges demand careful planning and collaboration . Just moments before we went to press , the taskforce voiced support for a co-ordinated move to T + 1 in the EU , ac- knowledging the benefits of an aligned approach across the entire European region , including the EEA , the UK and Switzerland . The taskforce stated that this followed a range of views being expressed as to whether the date identified for the UK transition , H2 2027 , could also be a feasible implementation date for the EU . The taskforce did , however , emphasise that depending on the exact definition of what regulatory , technical and operational changes will be required , a transition period of between 24 and 36 months will be required to accommodate the complexity of the market infrastructure in Europe . This could most likely come through an amendment to CSDR which would mandate a harmonised shortening of the
“ Although the UK can leverage lessons learned from the US , the US and UK are very different markets , and a simple copy and paste will not suffice .”
SONAL MEGHANI , FI SEGMENT AND REGIONAL STRATEGIST , SECURITIES SERVICES , BNP PARIBAS
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