Following the announcement by the US Securities and Exchange Commission today that the US will move to a one-day settlement cycle (T+1) by May 2024, Pete Tomlinson, Director of Post Trade at the Association for Financial Markets in Europe (AFME), commented:

“The May 2024 goal for moving to one-day settlement in the US is ambitious and will be a significant challenge for all market participants globally. AFME is supporting its members and the broader industry in preparing for this implementation.

“The move to accelerated settlement cycles is seen as a way to lower risks to financial systems and drive greater efficiencies in post-trade processes and other jurisdictions are now commencing their reflections on this process. However, adopting T+1 settlement in Europe will be significantly more challenging, given the fragmented nature of European markets and the greater operational, structural and regulatory complexity.

“Further analysis is required across the industry to quantify the costs and benefits, and the changes required to the current operating environment to facilitate such a move. AFME will work closely with all stakeholders to ensure a collaborative industry approach to this topic.”