[ W E E K 4 ]
T + 1 War Rooms – Asia :
and systems work seamlessly in servicing client needs in the shorter settlement cycle in the US , Canada & Mexico .”
He added that it was important to ensure that investors , whether booking FX directly with third-party providers or counterparts , could deliver funds on time for settlement . This was particularly relevant for transactions involving currencies like USD in markets like Asia . He noted that the key was confirming that the counterparty could meet these requirements to avoid any subsequent issues .
Van Dine said : “ The market had clear timelines and rules in place , which helped everyone prepare accordingly . There was extensive outreach to clients to educate them about the changes , and service providers made necessary adjustments to their systems to accommodate the shorter settlement cycle . Some even adjusted cut-off times to align with the new requirements .”
COLLABORATION AND CONSENSUS The industry experts unanimously agreed on the critical need for collaboration among markets as the rest of the world turns attention to their respective settlement cycles . “ It ’ s crucial to learn from each other ’ s experiences ,” emphasised one expert from an exchange . “ We ’ re digesting extensive feedback to refine our approach . Collaboration ensures a synchronised effort towards seamless transitions .”
Van Dine underscored the importance of this cooperation and thorough preparation . “ Aligning timelines and system interactions across jurisdictions is critical . Clear announcements and lead time are essential for intermediaries to enhance systems and ensure smooth transitions .”
The same expert from the exchange highlighted the complexities of these multi-year transitions , adding : “ It ’ s not merely about changing systems ; it ’ s about fundamentally transforming processes from front-to-back . Different regions face unique challenges , especially with time zone discrepancies . In Asia , for instance , we currently operate at T + 1.5 due to these issues . The feedback we ’ ve received has been invaluable , and we are actively analysing this information to outline potential strategies moving forward .”
A PHASED APPROACH One custodian pointed out that there were distinct phases in this transition . Initially , there was a significant effort on understanding and educating stakeholders about market nuances , such as the affirmation process . Once that understanding was established , the next phase involved accepting the necessity for change .
They noted that this acceptance was driven by the sheer size of the market demanding adaptation ; and opting out wasn ’ t feasible , adding : “ By having accepted the need for change , stakeholders had the time to implement those changes . Reflecting back , these phases were evident in both external and internal discussions .”
Reflecting on the operational changes , one expert shared , “ Moving to T + 1 didn ’ t present the dire challenges some anticipated . There were minor issues , like heightened reconciliation demands and slight adjustments in settlement cycles , but overall , the system adapted well .” This sentiment echoed across the panel , underscoring the industry ’ s preparedness and adaptability .
28 Global Custodian Week 4