Settlement risk
US primary dealers mark largest settlement failures to date under T+1
Hung-trade volumes hit highest in two years at the end of September
Bloomberg to launch T+1 FX fixing
Index arm to offer benchmark for value tomorrow outrights that settle in line with new US securities timeline
US MMFs’ cleared repos top half-a-trillion dollars
FICC-routed transactions increased 52% in the 12 months to April
FX dealers face end-of-day trading stress from T+1 shift
Experts say switch to using overnight swaps could be “problematic” and lead to wider spreads
EU index managers face funding risks as US moves to T+1
Rotations from European to US assets will need prefunding due to slower EU settlement
Snail race: the slow growth of securities lending CCPs
There’s underlying appetite to clear, but a structure to suit all participants is proving elusive
As T+1 looms, non-US firms consider out-of-hours trading
Pruned settlement cycle forces foreign buy-siders to explore automating the FX leg of securities trades
EquiLend cyber hack exposes trade reporting dependence
Ransomware attack at securities lending platform disrupts regulatory compliance
BoE edges closer on FX settlement risk clarity
Central bank’s FX head says new survey will help to identify where risks may lie
T+1: complacency before the storm?
This paper, created by WatersTechnology in association with Gresham Technologies, outlines what the move to T+1 (next-day settlement) of broker/dealer-executed trades in the US and Canadian markets means for buy-side and sell-side firms
Can CCPs provide a port in a storm for securities lending?
Basel III, T+1 and EquiLend scandal all incentivise clearing, but also disintermediation
Could intraday FX swaps help reduce settlement risk?
New swap platform hopes to ease funding pains, but can it promote more use of PvP?
On-chain FX’s brave new world excites some, worries others
Trading tokenised versions of currencies on blockchain could slash settlement risk but sceptics raise concerns over liquidity and pricing
Buy-siders to face rising settlement risks when 2 becomes 1
Non-US asset managers may miss crucial window to settle trades with CLS after switch from T+2 to T+1
GFXC fosters global awareness of T+1 impact on FX
Risk Live: Many non-US firms yet to realise FX implications of the country’s shift to shorter settlement times
T+1 to increase cash drag and funding costs, investors warn
Faster settlement will create cash shortfalls for non-US asset managers
MUFG’s settlement risk surges fourteenfold
Risk-weighted assets for Japanese lender’s unsettled transactions cross ¥300 billion mark in the first three months of 2023
Token effort is no blockchain boon for illiquid assets
Cash-like tokenised instruments find takers; initiatives based on less liquid assets struggle to take off
Stemming the tide of rising FX settlement risk
As the trading of emerging markets currencies gathers pace and broader uncertainty sweeps across financial markets, CLS is exploring alternative services designed to mitigate settlement risk for the FX market
Tales from the crypto prompt calls for FX-style market structures
Demands for interdealers and prime brokers to be brought into crypto market in wake of FTX debacle
RBC’s settlement risk charges blow up 260%
C$3.5 billion RWA figure marks one of the heftiest capitalisation of held-up trades ever by a bank