The European Union’s T+1 committee has reached a consensus on the first set of high-level recommendations for Europe’s switch to a shortened settlement cycle.
Members of the committee convened in person in Brussels on 28 May to finalise the proposals.
This is according to independent chair of the committee, Giovanni Sabatini, who, speaking at The Network Forum in Madrid, said the team is now working to collect all of the recommendations into a single report – due to be published at the end of this month.
“We have been able to run fast in less than five months to be able to agree on multiple complex recommendations, starting from the new operational timetable,” Sabatini said.
The industry has 27 months to go to the go-live date of T+1 across the EU, the UK and Switzerland – with policymakers and industry groups urging market participants to begin their preparations as soon as possible, to ensure a smooth transition.
During the panel, the audience were asked whether they had begun budgeting for T+1. Four in 10 (39%) respondents stating that they had not, but plan to do so soon. A further 3% said they have no immediate plans to start budgeting.
“We have a communication strategy to ensure we will be able to reach all market participants in the 27 jurisdictions,” Sabatini added. “It’s a big effort. We will be there to push for adherence to our recommendations.”
A recently published study from Firebrand Research found that the spend for the largest custodians on Europe’s transition to a T+1 settlement cycle is likely to top out at $36 million – including staffing and technology costs.
Virginie O’Shea, founder of Firebrand Research, said: “The European move to T+1 is undoubtedly much more complex from a planning and implementation standpoint than the North American transition. Not only are there more currencies, market infrastructures, market participants and regulators involved, but there are also significantly different market practices to accommodate.”