Funds trade body ICI Global has encouraged policymakers ahead of a meeting in Brussels this week to introduce a shorter trade settlement cycle.
The benefits of shortening the settlement cycle to a period of one day after the trade – “T+1” – are many, said the group’s Corrado Camera, director for public policy and regulation.
The Roundtable on shortening the settlement cycle in the EU was due to take place on Thursday (25th) and will convene representatives from the industry, EU institutions and the European Central Bank and Commissioner McGuinness is expected to provide a keynote speech.
“ICI encourages jurisdictions in Europe not to delay a decision to adopt a settlement period of one day after the trade (T+1). The benefits of shortening the settlement cycle are many, and they include increasing the liquidity in the system and reduced operational and counterparty risk,” said Camera.
Acknowledging challenges, including the need for a significant level of coordination among industry and regulators, Camera added: “ICI is prepared to extend our leadership and share the experience gained while leading industry efforts to prepare the move to T+1 in North America (May 2024) to help authorities and stakeholders overcome the challenges associated with this project.”
The roundtable is organised by the Directorate-General Financial Stability, Financial Services and Capital Markets Union to foster a debate on the introduction of a shorter settlement cycle in the EU.
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