The switchover to T+1, T+0 and potentially even instant settlement is going to cause logistical and operational challenges for clients. Working with best-in-class service providers will be essential if the process is to be straightforward.
Most importantly, custodians will need to have robust and automated technology solutions in place to help clients deal with the compressed settlement timeframes.
A “follow the sun” operating model is imperative here, as this will enable providers to support customers with their T+1 obligations across multiple time zones. Having established a local branch in the US in 2021, Conrad said SIX has since expanded its custody footprint to Singapore, enabling it to provide bespoke services to clients in both North America and Asia.
In addition to providing Swiss and international customers access to the US and Asian markets, it also enables SIX to offer US and Asian-based institutions access to all major markets across a broad range of asset classes, together with T+1 support, through a single contractual relationship.
As and when atomic settlement is adopted, SIX is also well positioned, thanks to its Digital Exchange (SDX), continued Conrad, which can already facilitate instantaneous settlement.
As more markets make the T+1 leap, engaging with service providers which have credible technology solutions and a global operating model will be critical, if financial institutions are to cope with the transition.