[ I N D E P T H | T + 1 ]
Speaking to The TRADE, Adam Conn, head of trading at Baillie Gifford, confirms that harmonisation with the EU and CH has been a key focus point when looking at the UK move to T + 1, adding:“ We also must look beyond [ Europe ] and view things globally […] Taskforces in the UK
“ If you ' re an international investor the more markets that you have that settle at the same time the easier.”
ADAM CONN, HEAD OF TRADING AT BAILLIE GIFFORD
and across Europe will want to make sure that markets remain accessible.
“ Hopefully most of the heavy lifting has already been done with the US move, but there ' s going to be a need to ensure that deadlines are appropriate for Asian investors to be able to fulfil the needs for T + 1 settlement.”
When it comes to innovation and the potential impacts of largescale change, market players are accustomed to looking westward primarily – that is, to North America – a trend visible not just across the capital markets, but the world over.
However, when it comes to the flows between Europe and APAC, market participants are keen to take proactive steps to ensure this relationship is protected, making clear the value of the symbiotic activities between the two regions.
The cost of being out of alignment There are two ways to look at the APAC conundrum when it comes to Europe’ s T + 1 shift – the effect on Asia trading in Europe, and
50 // TheTRADE // Q1 2025 vice versa.
In terms of the current state of play, Aaron Joel, equity sales trader at CGS International Securities Singapore, tells The TRADE that there is an increased flow from APAC into European markets being observed, explaining that this is“ particularly in developed Europe as APAC clients seek to outperform their local benchmarks, which have not been as competitive on returns.”
“ This trend highlights the growing importance of Europe as a destination for APAC-based investors.”
Andrew Douglas, chair of the UK’ s T + 1 Taskforce further echoes this sentiment, highlighting that“ in the same way that Asia Pacific investors are important to the UK, UK investors and certainly American investors are important to Asia Pacific countries”.
As the buy-side was quick to point out from the off, there are definitely real costs associated with being out of alignment with not just neighbours, but also global counterparties. Though the US shift to T + 1 was relatively painless in the end, ultimately this is a different beast.
When talks of a European shift began in earnest, the asset management community was keen for Europe to shift to one day settlement as soon as possible, with the Investment Association( IA) publicly pushing for a 2026 move.
Douglas explains that the buy-side was keen to
“[...] All in all I think we ' ve done a pretty good job of keeping the market available for Asia Pacific investors.”
ANDREW DOUGLAS, CHAIR OF THE UK’ S T + 1 TASKFORCE
bring this forward by a year due to dislocation from the US market proving a lot higher than anticipated.
“ Relatedly, what you ' ll see from an Asia specific perspective is their dislocation then from global markets might speed them up too, might speed the move up for certain jurisdictions anyway.”
Conn concurs:“ It really comes back to the harmonisation point- we must find the date that works for everyone which is completely the right approach […] On the one hand yes, we thought let ' s push for an earlier start but on the other hand, if we can get the rest of the region to move at the same time then that ' s a win.