[ W E E K 3 ]
T + 1 War Rooms – Europe :
that we ’ ve learned and we ’ re trying to improve on .”
THE UK ’ S MOVE TO T + 1 During the week that the UK held major discussions around its own move to T + 1 , the UK and Europe ’ s plans were also a point of discussion during the roundtable discussion from the outset .
There were seemingly two views – one from the buy-side and the other from those involved in the UK taskforce assessing the transition . The taskforce view was that “ there are no medals for doing it quickly , but there are for doing it right ”. Meanwhile the buy-side appeared to feel that the priority was for the UK to align with Europe , but if that doesn ’ t happen , then get on with it as quickly as possible . “ We are a different market , we have a higher percentage of overseas investment , FX is a bigger issue for us , so is funding . We have things to consider that weren ’ t considered with the US move ,” said one participant .
The opposing view has been ‘ if the US did it well in their timeframe – why should the UK wait ?’. One buy-sider commented : “ For us it ’ s the disharmony between the markets that is the issue for us – so the quicker all markets move to harmony the better for us .”
Another buy-sider said : “ When we ask ourselves about the best alignment – it is the UK aligning with the EU which is important , but if that doesn ’ t happen then we are not concerned about the timeline .”
During a panel discussion last week at the Accelerated Settlement in the UK event , moderated by Ayesha Ghafoor of UK Finance and involving experts from across the industry , experts cautioned against a copy-paste approach from the US model of transitioning to a T + 1 settlement cycle due to significant differences in market structures and regulatory environments .
Sebastijan Hrovatin , deputy head of unit , financial markets infrastructure unit at the European Commission , emphasised the need for careful planning and alignment within the EU context , stressing that while the US move set a global benchmark , Europe has to navigate its own path considering it has a diverse set of market infrastructures and regulatory landscapes .
Andrew Douglas , chair of the UK T + 1 Taskforce Technical Group , underscored the ongoing efforts to draft an implementation plan by 2025 , emphasising the need for comprehensive stakeholder engagement and adaptation rather than a direct replication of US strategies .
Picking up on that point , Sachin Mohindra , executive director , global banking and markets , client and market solutions at Goldman Sachs , pointed out critical differences between the US and UK markets that complicate a straightforward adoption of T + 1 . “ It ’ s not as simple as that ,” Mohindra noted . “ The market structures are quite different ; the US has a single domestic infrastructure stack , whereas Europe and the UK have multiple infrastructures .” He highlighted the need for a tailored approach that considers these complexities , including the role of clearing houses and the variability in transaction mechanisms .
Mohindra emphasised the importance of learning from US successes in enhancing operational efficiency and reducing post-trade processing times but cautioned against a direct copy-paste approach . “ For the UK , one immediate lesson was how the US defined the scope outside of regulatory remit only three months before go-live ,” he added , contrasting it with the UK ’ s earlier engagement in similar discussions . He also added : “ In the UK alone , we have more than one clearing house . These differences mean that it ’ s not just a copypaste job you see .”
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