CASLA: T+1 achieves a smooth landing following implementation
11 June 2024 Canada
Image: Jag_cz/stock.adobe.com
T+1 proved to be a smooth transition for the US and Canada, and now participants have advised the UK not to be afraid to 鈥渉ave those difficult conversations鈥�, as the country works toward the implementation of a shorter settlement cycle.
Market participants gathered to attend the 14th annual Canadian 色花堂Lending Association (CASLA) conference in Toronto. The panel entitled 鈥楾+1 in the Rearview鈥� discussed the move to a shorter settlement cycle for the US and Canada over a week after its official implementation.
Moderated by Phil Zywot, head of North American equities and US corporates at BNY, panellists were questioned on the unexpected surprises of the transition, recalls, automation, and how the UK should handle its own transition to T+1.
It appeared that the 鈥渦nexpected surprise鈥� from the T+1 go-live was that there were no surprises, said Ahmed Shadmann, head of Agency Trading Canada and non-US equities at State Street. He added: 鈥淚 was preparing for the end of the world scenario, but it was pretty smooth. The preparation paid off.鈥�
For one panellist, there were 鈥渁 few hiccups鈥� during the transition, however, market participants were prepared and continued to monitor the move.
An industry fear regarding the potential increase in fail rates during 27-28 May 鈥渄id not materialise鈥�, confirmed Mathilda Yared, managing director of global securities finance at National Bank Financial.
The panel agreed that the transition to T+1 brought the industry together, as firms participated in 鈥渁n immense amount of collaboration and discussion鈥�. However, one panellist in particular said that T+1 may be in the rearview, but it is a long road ahead. He advised firms to remain vigilant and to not become complacent.
In April, the UK government gave the go-ahead for the country to move to a T+1 settlement cycle. This journey will be led by the Accelerated Settlement Taskforce (AST), with the aid of its Technology Group, which aims to implement T+1 no later than the end of 2027.
Offering advice on the UK鈥檚 T+1 implementation, the panel noted that firms should not be afraid to have 鈥渢hose difficult conversations鈥�. Companies should partner with all of the respected firms, leverage their vendors, and listen to the solutions that are out there.
Alexa Lemstra, director of client relationship management at EquiLend, encouraged the UK to 鈥済et a head start鈥� as deadlines will 鈥渃ome up quickly鈥�.
She continued: 鈥淯se the budget and focus of the deadline to look at your full lifecycle and understand where you can find more efficiency. Participants will be moving into a real-time environment, and so they will need that risk mitigation view, transparency and visibility in the back, middle and front office. Everyone needs to move quickly to handle any exceptions coming out.鈥�
In conclusion, Yared said: 鈥淧artnerships between borrowers and lenders is extremely important. The UK needs to establish that line of communication, even if it is difficult.
鈥淭ake a look at the available market infrastructure. Maybe what you want to achieve as an industry with the currently available infrastructure is not possible, but there is no reason why firms can鈥檛 get together and put something in place that will help reach the needed end result, like we did in Canada.鈥�
Market participants gathered to attend the 14th annual Canadian 色花堂Lending Association (CASLA) conference in Toronto. The panel entitled 鈥楾+1 in the Rearview鈥� discussed the move to a shorter settlement cycle for the US and Canada over a week after its official implementation.
Moderated by Phil Zywot, head of North American equities and US corporates at BNY, panellists were questioned on the unexpected surprises of the transition, recalls, automation, and how the UK should handle its own transition to T+1.
It appeared that the 鈥渦nexpected surprise鈥� from the T+1 go-live was that there were no surprises, said Ahmed Shadmann, head of Agency Trading Canada and non-US equities at State Street. He added: 鈥淚 was preparing for the end of the world scenario, but it was pretty smooth. The preparation paid off.鈥�
For one panellist, there were 鈥渁 few hiccups鈥� during the transition, however, market participants were prepared and continued to monitor the move.
An industry fear regarding the potential increase in fail rates during 27-28 May 鈥渄id not materialise鈥�, confirmed Mathilda Yared, managing director of global securities finance at National Bank Financial.
The panel agreed that the transition to T+1 brought the industry together, as firms participated in 鈥渁n immense amount of collaboration and discussion鈥�. However, one panellist in particular said that T+1 may be in the rearview, but it is a long road ahead. He advised firms to remain vigilant and to not become complacent.
In April, the UK government gave the go-ahead for the country to move to a T+1 settlement cycle. This journey will be led by the Accelerated Settlement Taskforce (AST), with the aid of its Technology Group, which aims to implement T+1 no later than the end of 2027.
Offering advice on the UK鈥檚 T+1 implementation, the panel noted that firms should not be afraid to have 鈥渢hose difficult conversations鈥�. Companies should partner with all of the respected firms, leverage their vendors, and listen to the solutions that are out there.
Alexa Lemstra, director of client relationship management at EquiLend, encouraged the UK to 鈥済et a head start鈥� as deadlines will 鈥渃ome up quickly鈥�.
She continued: 鈥淯se the budget and focus of the deadline to look at your full lifecycle and understand where you can find more efficiency. Participants will be moving into a real-time environment, and so they will need that risk mitigation view, transparency and visibility in the back, middle and front office. Everyone needs to move quickly to handle any exceptions coming out.鈥�
In conclusion, Yared said: 鈥淧artnerships between borrowers and lenders is extremely important. The UK needs to establish that line of communication, even if it is difficult.
鈥淭ake a look at the available market infrastructure. Maybe what you want to achieve as an industry with the currently available infrastructure is not possible, but there is no reason why firms can鈥檛 get together and put something in place that will help reach the needed end result, like we did in Canada.鈥�
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