ASX Releases Whitepaper on T+1 Settlement

ASX has released an industry whitepaper to facilitate a discussion on the potential move from T+2 to T+1 settlement in Australia and is inviting industry stakeholders to make a submission.

The whitepaper outlines how Australia’s unique market structure, size, time zone, investment flows, and trading activity necessitates careful industry consideration of the risks, benefits, and costs of transitioning to T+1.

ASX Group Executive, Securities and Payments, Clive Triance, said: “ASX has a critical role to play in facilitating the discussion on whether shortening the settlement cycle promotes the interest of the Australian market as a whole.

“Moving to T+1 is complex and we know there are a wide range of views. The process to canvass industry feedback will highlight the differing impacts for various stakeholders but the final decision will need to ensure we prioritise outcomes that support strong, secure and fair financial markets.

“In putting together this whitepaper, we recognise there are various factors that will impact a decision to transition to T+1. This includes the type of service an entity provides, its own project pipeline, the cost and resourcing involved, along with potential implementation risks. Of course, this is weighed up against the potential benefit of a prompt implementation through harmonisation of settlement and funding cycles with other leading global markets.”

The publication of the whitepaper follows the establishment of the T+1 Working Group that was formed by the ASX Business Committee in December 2023. The Working Group is comprised of industry experts who have provided input into the preparation of the T+1 whitepaper.

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