THETRADETECHFX DAILY cover feature
Did CLS make the right call in not extending its cut-off after T + 1 ?
Despite the multi-currency settlement system ’ s decision coming under fire from both the buy-side and custodians , CLS has not seen a drop off in daily settlement values and volumes , suggesting – at least for now – that it may have been the right decision .
The decision by CLS not to extend its cut-offs in the lead up to North America ’ s shift to T + 1 was met with concern from several corners of the industry . However , in its first analysis post the implementation , the data shows that perhaps the multi-currency netting system was wise to stick to its guns . Given that CLS had chosen not to amend its cut-offs , there were fears prior to the transition to T + 1 on 28 May that asset managers would face a last-minute scramble to adjust their operations and trading to avoid pre-funding , bilateral settlement and moving team members to the US . However , according to an update in July , CLS had seen no decrease in average daily settlement values and volumes over the first month of T + 1 in the US , though some trends were noted as emerging . The TRADE understands that this trend has held in the months since . In its July update , the multi-currency settlement system said that June 2024 was a record month with average daily values of $ 7.8 trillion . These initial signs suggest that the industry has thus far avoided having to shift to bilateral settlement and that foreign
10 THETRADETECHFX DAILY