T+1 settlement – an uphill battle for Asia-Pacific

IT IS rarely a good idea to reinvent the wheel but, every now and then, something comes along to improve the wheel – making it more efficient, resilient, and robust. In the post-trade world, that something is on the horizon with the movement to T+1 (trade plus one) in North America next year.

Yet, despite all the promise of reduced settlement risk, the realities for market participants around the world are becoming much clearer, and it doesn’t look good.

Unsurprisingly, the focus is largely on the US market, due to the size and volume of trading in that market. Domestically speaking, operational challenges exist to achieve such an ambitious goal, with banks, asset managers and brokers scurrying to assess their internal processes to ensure they can meet the shorter settlement timeframe.