In response to a ‘call for evidence’ on shortening settlement cycles in the European Union (EU), published by the European Securities and Markets Authority (ESMA) today, Pete Tomlison, director of post trade at the Association for Financial Markets in Europe (AFME), said, “This call for evidence is an important step in moving forward the debate on T+1 settlement.”
“Moving to T+1 should not only be a question of ‘when’, but also ‘why’ and ‘how’,” he continued. “It is important to ensure that any decision to shorten the settlement cycle is underpinned by a robust qualitative and quantitative analysis of the potential benefits, risks and costs, and also takes account of the unique complexities of EU capital markets.”
He also noted that there are potential risks if the industry does not establish a clear path forward.
“Any potential move to T+1 will require collaboration from a broad range of industry stakeholders, with the ultimate objective of making EU securities markets safer and more efficient,” he said. “We welcome the opportunity to contribute to this initiative.”
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