ICMA: T+2 Migration Largely Successful

The International Capital Market Association (ICMA) and the ICMA European Repo Council (ERC) reported that the initial feedback from members and operations working groups has indicated that the transition to settlement at T+2 for the European fixed income markets has been largely successful with few issues.

The migration of the standard settlement cycle for cash trading in bonds from settlement at T+3 (Trade date + 3 working days) to T+2 was made in response to the EU Central Securities Depositories Regulation (CSDR) and took effect on 6 October 2014.

“Feedback from ICMA and ERC members suggests that there were very few issues or incidents on the migration settlement date of 8 October,” said Godfried De Vidts, Chair of ICMA’s European Repo Council. “Netting and pair-offs across trades transacted on 3 and 6 October meant that settlement volumes on 8 October only increased by around 50%. Market-wide efforts to ensure timely affirmation and allocations resulted in only around 1% of total traded volumes mismatching and subsequently requiring post-trade repair. Settlement efficiency levels have remained high during the migration, with only a negligible uptick in settlement fails on 8 October and there have been no observable issues with agent and clearing funding, bottlenecks and settlement cycle events.”

De Vidts noted that, from the perspective of the repo markets, the shorter-settlement cycle for underlying securities, and the migration of liquidity for most financing trades from T+2 to T+1, has not posed any immediately observable issues. However, “the ERC will continue to monitor the situation closely, particularly the impact of increased volumes in same-day collateral and liquidity management,” he said.


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