[ W E E K 4 ]
whatever it is , we will process .”
“ Now , I think the complexity here was that affirmation was not a mandatory requirement and was now becoming one . If India , a restricted market , can do it and we ’ re able to do the US with many clients coming in from different regions to fund dollars , certainly we ’ re going to be able to fund Europe activity on a T + 1 basis .”
“ I think it ’ s just understanding what the ecosystem is and what needs to be done to get there . I definitely feel like having that date is the key thing , because people will work towards it .”
Another speaker said that the work put in throughout the US by service providers who are global in nature would also benefit a European switch .
Whether you give them one year or five years , they ’ ll be able to .”
Another expert echoed the ‘ set and date and get on with it ’ approach – something SEC chair Gary Gensler said to a UK audience last month .
“ If it ’ s a very efficient operating market , then five years , three years , is just far , far too much because whatever you ’ re doing , the custodians need to communicate to clients , broker dealers need to communicate to clients , and clients – at the end of the day – are not going to make the changes on day one of three , they ’ re going to make the changes far later in the journey .
“ The more time you give people to admire the problem , they ’ ll do it and take advantage of it . I ’ m trying to figure out where the concern really is – and maybe it is the funding and FX piece is that much larger [ in Europe ].”
The UK put together a taskforce in 2022 , releasing its first report in March of this year that confirmed that the UK should move to T + 1 no later than December 2027 . Its final report will be published at the end of this year .
Meanwhile in Europe , the European Securities and Markets Authority ( ESMA ) is set to publish its own report at the end of this year , latest in January 2025 .
Pitts noted : “ Every market will have nuances – yes , the US is much easier in terms of one currency versus Europe and multi currencies – but at the end of the day , I think it ’ s just about understanding what the ecosystem is , what changes are needed and what needs to be done to , to get there .” “ From a custodial perspective though , we have to be nimble to support whatever clients are doing . So T-zero to T-99 ,
WRAPPING UP The move to T + 1 in North America has been a long journey , from an unlikely spark in the GameStop saga , to a controversial launch data to a success story which few predicted . But the achievement didn ’ t happen overnight and came down to thousands of combined hours from the industry , collaboration and working groups across multiple practices and preparing for every eventuality .
So while the message to the rest of the world may be ‘ to get on with it ’ there should be no mistakes made about just how much work went into making the transition look easy .
“ It ’ s important not to underestimate how much work went into it and how critical that is ,” concluded one speaker . “ We pulled together the industry , working groups , developing the industry playbook and all the other documentation . We had multiple training sessions and webinars across the entire industry . We had nine months ’ worth of testing . We had a highly orchestrated implementation schedule . So I think just the organisation and the preparation that went in through the entire session , I think is really what led to the success .
“ I think other markets will have to do the same thing to really go deep dive in their process , into how they exchange information with different counterparts and how they interact and support each other and to replicate , at least from a communication standpoint . I think that ’ s where North American has demonstrated best practices and I do think that a number of us are involved in the global conversation because of that .
“ But don ’ t think it ’ s easy .”
Week 4 globalcustodian . com 9