The Association for Financial Markets in Europe (AFME) welcomes the recent report of the Chair of the UK Accelerated Settlement Taskforce and its conclusion that the UK should adopt a T+1 settlement cycle within a reasonable timeframe. AFME particularly welcomes the recommendations that the UK, EU and other European jurisdictions should continue to explore opportunities for close collaboration in order to ensure alignment on T+1 settlement cycles and to establish a Technical Group comprising operational and market experts.

Commenting on the report AFME’s CEO, Adam Farkas, said, “AFME agrees with, and supports, the conclusion of the report that UK securities markets should adopt a T+1 settlement cycle, within a reasonable timeframe. The report recommends a coordinated approach across the UK, EU and other European jurisdictions. AFME fully endorses this conclusion, and we further note that the report does not identify any material advantage for UK capital markets to move to T+1 out of step with regional partners. We therefore call on authorities to adopt a collaborative approach in order to reach a pan-European consensus on timing.

We highlight the need for further detailed technical analysis across Europe in order to determine the appropriate implementation date, and the nature and timing of any broader market changes that are necessary to facilitate T+1. This analysis should incorporate lessons learned from the US move to T+1 in May 2024. We therefore welcome the establishment of the Technical Group and we will continue to share our, and our members’ wealth of expertise during the next phase of work.”

Source: AFME

ICMA welcomes Geffen Report on faster settlement of financial trades in the UK

ICMA welcomes the report released by the Chairman of the UK Accelerated Settlement Taskforce (AST), Charlie Geffen (the “Geffen Report”). ICMA has been a member of the AST since its inauguration in December 2022, and an active contributor to the constructive discussions. While the report reflects the Chairman’s personal views and conclusions, we recognise the positive evolution over the past months which have led to an overall more balanced report that ICMA can broadly support.

In particular we welcome:

(i) The more realistic timeline provided, with a target date in 2027,

(ii) the proposal for a narrow scope of instruments which would exclude instruments settled outside of the UK, such as Eurobonds; and

(iii) a relatively flexible mandate given to the newly established Technical Group (TG), of which ICMA forms a part, and which has already established itself as an open and expert forum largely driven by market practitioners.

We look forward to further productive work over the next months within the TG and associated subgroups, and towards the Final AST report which is expected later this year.

While we believe that the case for T+1 in Europe needs to be weighed more carefully, taking into account the significant risks, challenges and costs as well as longer-term benefits arising from such a move, we are keen to continue to play an active and constructive role in the discussion, both in the UK and the EU.

Source: ICMA