ASX seeking views from key stakeholders on a potential move to T+1

Though the decision would be driven by regulators, the ASX is engaging with key market players on whether Australia should move to T+1, what would need to change to support the transition and how the move would be co-ordinated with New Zealand.

The Australian Securities Exchange (ASX) is engaging with stakeholders on a potential move to T+1 to gain industry sentiment on a shortening of the settlement cycle within the country. 

Though ultimately a decision driven by regulators, the ASX this month will survey business committee members for “high level views” with summarised feedback to be discussed in a July meeting. 

Speaking on a webinar hosted by the The Australian Custodial  Services Association, Karen Webb, senior Manager, issuer services, securities and payments at ASX, said that Australia is in a ‘wait and see what happens’ position, with regards to the transition in the US and Canada, and explorations by taskforces in countries like the UK.  

“We’re really interested in seeing what the reasons are underpinning those changes – there’s a fair bit of work to do on the costs and benefits,” Webb said. 

“More recently we have included the discussion for T+1 settlement on the business committee – our key industry forum for discussions on clearing and settlement – [and] if we were to make any recommendations to change to T+1, those recommendations would ultimately go to our clearing and settlement boards who would review from a number of perspectives and ultimately agree or not agree.” 

Australia moved to T+2 in 2016 at a similar time to the US, however the American market has now pushed on ahead of other major markets in Europe and Asia with its T+1 plans, leaving other markets facing tough decisions over their own future moves in terms of industry alignment. 

“In absence of regulatory guidance on moving to T+1, our view is that it is not an ASX decision but we need a consensus across the industry,” said Webb. “The industry view should be reached by market stakeholders.” 

Within its survey, the ASX will explore the impact on members’ operations by the transition to T+1 in other markets while Australia remains on T+2, what might need to change to support a transition and corporate action perspectives. 

The consultation will also seek input on scope, with the move to T+1 co-ordinated across equities and debt as well as its neighbouring country New Zealand.