Conversely, SIX’s presence in the US is an excellent opportunity for the company to support North American clients in Europe with any alterations to its settlement system. Having moved fairly recently to T+2 and introduced the Central Securities Depositories Regulation (CSDR), appetite for settlement compression in the EU is fairly muted right now, but changes cannot be ruled out.
“Any implementation of T+1 in Europe will be far more cumbersome than in the US, as there are multiple CSDs and currencies in these markets, and a more complicated regulatory environment,” comments Haag. Again, this cements the importance of having a strong footprint in Europe to support the needs of US clients, should T+1 be pursued.
With trade settlement cycles undergoing significant changes, it is vital that clients engage with service providers who have a physical presence in the countries where reforms are taking place, as this can help support them with both their operations and market advocacy efforts.